Dani Rodrik: prediction

Transcript context

…Let me try to pin down a fundamental aspect of your thought that I see running through a lot of different papers. That’s the idea that there’s something special about manufacturing. As I understand you, if you do industrial policy and you get the right kind of manufacturing that puts you on a better path. Your papers on productivity convergence — once you’re started in manufacturing, according to your data, you get bigger ongoing gains than you do an agriculture. Catch-up in agriculture is especially slow. I find this intuitively plausible but if we try to ask at the most foundational level, what is it exactly that’s the difference between agriculture and manufacturing which accounts for this? What are the microfoundations of where that comes from? I think a couple of things. One is that manufacturing technology is much more easily transportable across international borders. It’s much easier to adopt and adapt manufacturing technology. You can take a textile and clothing plant. You still have to tinker with it, but it’s much easier to transplant, unlike many agricultural technologies. We’ve seen that, for example, in the case of the Green Revolution. It required a lot of on-the-ground adaptation because the weather and soil conditions can be very different. If you will, the non-traded component of that technology transfer is much greater in agriculture. For that matter, it’s also in services. You can figure out how to run a hospital system or education system in an advanced country. You’re never going to be able to just take that and transplant in a developing country because, technically speaking, the non-traded component of that technology, or the latent part of the technology that requires that adaptation to local contexts. So it’s about the people and the culture?…

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