Tuesday, January 22, 2008
Lin's long swim
Jan 17th 2008, The Economist
An economist with an unusual past
THIRTY years ago China's leaders used to call the World Bank a tool of imperialism. Now China is one of the bank's top borrowers, and in December it became a donor, on a small scale.
China may soon make a big contribution to the bank's intellectual ranks. According to whispers at the institution, its new chief economist will be a Chinese citizen. Justin Yifu Lin is the director of the China Centre for Economic Research at Peking University. He has twice won his country's top economic honour, the Sun Yefang award, and he has published in the leading journal of his profession, the American Economic Review. But this brilliant record masks an unlikely past. He was born not in the People's Republic of China (the Mainland) but in Taiwan (the Republic of China). He defected to the mainland after serving in the Taiwanese armed forces.
After earning a master's degree in political economy from Peking University, at a time when it was still steeped in Marxism, he earned an economics doctorate from the University of Chicago, where the market reigns. So his intellectual portfolio is perfectly hedged. That will serve him well in his new post. His adopted land has become an inspiration to many poor countries, especially in Africa. Their policymakers argue that China's path to prosperity defies and discredits the simple formulas propagated in Washington.
Mr Lin is a student of China's economic reforms. But his scholarship, like his past, straddles ideological gaps. He believes governments go wrong when they defy the law of comparative advantage, promoting heavy industries in countries where capital is scarce and labour abundant. The government's first duty, he argues, is “to remove all possible obstacles for the function of free, open and competitive markets”. Spoken like a Chicago man.
But Mr Lin also says government has a second duty. As an economy develops, the state should coax firms into more sophisticated industries. This prodding may be needed for several reasons. To cite one: firms may not know which industries are viable, and which are not. So the government should subsidise pioneers who break a path for others.
Washington's financial institutions were once notorious for their dogmatic prescriptions. Now they prefer piecemeal reforms and eclectic advice. That is a tide Mr Lin can probably swim with.
An economist with an unusual past
THIRTY years ago China's leaders used to call the World Bank a tool of imperialism. Now China is one of the bank's top borrowers, and in December it became a donor, on a small scale.
China may soon make a big contribution to the bank's intellectual ranks. According to whispers at the institution, its new chief economist will be a Chinese citizen. Justin Yifu Lin is the director of the China Centre for Economic Research at Peking University. He has twice won his country's top economic honour, the Sun Yefang award, and he has published in the leading journal of his profession, the American Economic Review. But this brilliant record masks an unlikely past. He was born not in the People's Republic of China (the Mainland) but in Taiwan (the Republic of China). He defected to the mainland after serving in the Taiwanese armed forces.
After earning a master's degree in political economy from Peking University, at a time when it was still steeped in Marxism, he earned an economics doctorate from the University of Chicago, where the market reigns. So his intellectual portfolio is perfectly hedged. That will serve him well in his new post. His adopted land has become an inspiration to many poor countries, especially in Africa. Their policymakers argue that China's path to prosperity defies and discredits the simple formulas propagated in Washington.
Mr Lin is a student of China's economic reforms. But his scholarship, like his past, straddles ideological gaps. He believes governments go wrong when they defy the law of comparative advantage, promoting heavy industries in countries where capital is scarce and labour abundant. The government's first duty, he argues, is “to remove all possible obstacles for the function of free, open and competitive markets”. Spoken like a Chicago man.
But Mr Lin also says government has a second duty. As an economy develops, the state should coax firms into more sophisticated industries. This prodding may be needed for several reasons. To cite one: firms may not know which industries are viable, and which are not. So the government should subsidise pioneers who break a path for others.
Washington's financial institutions were once notorious for their dogmatic prescriptions. Now they prefer piecemeal reforms and eclectic advice. That is a tide Mr Lin can probably swim with.
Labels: Justin Lin, Justin Yifu Lin, World Bank, Yifu Lin, 林正義, 林正誼, 林毅夫
¶ 7:40 AM
