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Economics Essays

BAD SAMARITANS :THE GUILTY SECRETS OF RICH NATIONS

1. 1. Globalisation is a complex phenomenon and general perception is that it is essentially associated with neo liberal economic policy which has favoured the developing countries to rise as global economic power. Ha Joon Chang , a Cambridge economist , has brought out startling facts about globalisation. Chang, in his book, does not deny the benefits to developing countries of integration into world economies. However, he draws on lessons from the history to argue that they must be allowed to integrate in their own terms.
   2. Ha Joon Chang ‘s research is based on his experience as consultant for world Bank , various UN agencies and for govts of Brazil , Canada and Venezuala. He has authored world renowned books such as ” Kicking Away the Ladder – Development Strategy in Historical Perspective ‘has won Myrdal prize. Today, he is considered the most effective critic of globalization in the world.
   3. Chang’s book takes a wide angled view of the theory of neo liberal economy propagated by developed nation and relates it to developing nations. The book consists of 9 chapters. In chapter 1 2 , the author brings out startling facts about success story of developed nation. It is a misnomer in world arena that these countries became great power by embracing free trade , opening up to foreign direct investment and minimizing government interference in economy. However, in reality, countries such as USA, UK, Japan Korea developed their economies not by pursuing liberal economic policies but by protecting them nurturing them through govt intervention, subsidies, control on foreign investment imposition of tariffs bans. In chapters 3 to 9 , the author has used mixture of economic theory , history evidences to prove that neo liberal economies are unfavourabale to developing nations and it can bring

many miseries such as income inequality , lowered growth rates economic instability.

1. In essence, Chang’s book advocates the following :-(a) The developed countries have become rich by protecting their industries

   and not competing until they have become strong to compete in world

   market.

   (b) For a long term economic development, a government should not

   concentrate on� foreign direct investment, rather, they should try to protect

   and encourage domestic investment.

   (c) The privatisation of state monopolies in services are problematic

   because� such countries have poor regulatory methods.

   (d) The theory of comparative advantages is a flawed method to depict

   economic reality. The gains of few from trade are outstripped by the loss of

   many, specially in developing countries.

   (e) The patent system is becoming a barrier to technology economic

   development . It is denying developing countries access to necessary

   technology required for development

2. Chang has not only criticized the neo liberal economic policy, but has also discussed alternate solution to present system in his book. According to him poor countries should be allowed to pursue mixture of market liberalisation and government interference.
3. Chang’s argument are clear, well researched supported by economic political history . He has very logically brought out double standards� in the policy of developed nation by forcing developing countries to adopt neo liberal projects, whereas, they followed protectionist attitude to achieve own economic development. That is why Chang has described them as ” Bad Samaritans�. The propagator of neo liberal economic society may not like this book. The book at certain places seems to be biased and is unable to justify success story of countries like India by adapting neo liberal approach. However, this book is different from others as it encourages readers to think examine critically the theory of liberal economic society propagated by the developed countries. The book is strongly recommended for economics enthusiasts.