To most of those who govern the global economy today, -the policy makers of the developed countries, - proprietors of large enterprises, - international economic organizations, developing countries have to adopt “good” economic policies and model institutions that the developed countries used to ensure a proper take off: for example the liberalization of investments and trade. Many questions have certainly been asked on the nature of these reforms and institutions for developing countries. But were these the same routes taking by developed countries to be where they are today?
The U.S. for example which we suppose has attained the peak of world economy because of its policies founded on commercial liberalization, is in fact one of the countries that has used these instruments most aggressively. Between the mid 19th century and the Second World War, it had the most protected economy in the world. Great American thinkers like Alexander Hamilton who systematically elaborated the argument of “infant industries” justifying the protection of manufacturing enterprises in less developed economies. However he knew the true nature of the game. He knew that great Britain had acquired an advanced economy because of enormous protection and subvention measures and had to do the same to succeed.
Criticizing British recommendations favouring commercial liberalization, Ulysses Grant, the US president between 1868 and 1876 retorted that “in two hundred years when America has extracted from protection all that it can, it will then liberalize its trade. After the Second World War, the US seized the first position in world economic matters. It withdrew from the ladder by sermonizing their trade liberalization to developing countries.
We can then logically question if the recommendations made today by these developed countries have the same objectives, or is it just a coincidence that the economic growth within developing countries has become very difficult in the past three decades? It is actually within this period that rich countries started putting pressure o n developing countries to adopt a pretentious “ world standard” in political and institutional matters.
How do we change this? Historical facts concerning real experiences of the developed world have to be made public. Not only to reestablish the truth but also to permit the developing nations to undertake more informed choices. Secondly we have to admit that the orthodox returns is not working and that there is no “model” that everyone has to copy from. Thirdly the rules of the world trade organinsation have to be re written in a way that developing countries can actively use customs duties and tariffs to aid the growth of its enfant industries. Finally good functioning of institutions has to be ensured.
If we could adopt economic policies and institutions that are best tailored to our specific conditions, then we will be capable to increase its economic growth more rapidly. In the long run, these will also benefit developed economies in increasing trade and investment opportunities.
The fact that these so called developed countries don’t want to understand this analyses constitutes a tragedy of nowadays.