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two key pillars of economic development

by on 2011/12/07

Extract from ‘Rural Development in a New World’ (speech for Tunisia, 9 & 10 December)

“For me there are two key pillars of economic development, and not just one. One is indeed the local market – commodity and service markets need to work well, which means they should not be dominated by monopolies or cartels, that access should be easy and with low transactions costs, and they should be transparent (no information barriers). The other is what Adam Smith called the ‘just rule of law’ which to me includes respecting a code of human values and rights or social contract between citizens and the state. The second does not follow from the first. Nor does the first follow from the second. Both pillars are needed. A crucial illusion of neoliberalism over the past 30 years has been the pretence that both can be produced by the market alone.”

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From → Rural policy

One Comment
  1. And I would add a third pillar as well, namely local and regional empowerment – the ability to act collectively at local levels, not only in terms of providing local public goods and articulating local needs, resources and potentials, but also in terms of political voice. Central governments will always ignore the social and geographical ‘peripheries’ unless they have meaningful political voice. This is one of the reasons why Norway still has healthy rural and remote communities! This cannot be produced by central state agencies (‘technopoles, growth poles, regional development agencies etc) – it needs local democracy with real power and fiscal ability.

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