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The Growth Report
Strategies for Sustained Growth and Inclusive Development
Preface
This report brings together the views of a Commission of 19 leaders, mostly
from developing countries, and 2 academics, Bob Solow and me. The leaders
carry with them decades of accumulated experience in the challenging
work of making policies that infl uence millions of people’s lives: their job
prospects, their health, their education, their access to basic amenities, such
as water, public transportation, and light in their homes; the quality of their
day-to-day lives; as well as the lives and opportunities enjoyed by their
children.
They have wrestled with the complexity of all the basic ingredients of
growth strategies: budget allocations, taxes, exchange rates, trade and
industrial policies, regulations, privatizations, and monetary policies, to
name just a few. Sometimes these choices seem remote from people’s dayto-
day lives. But they have a tremendous impact.
It has been an honor for me to serve with them and also a breathtaking,
high-speed learning process. I hope we are successful in sharing their
insights, and those of a dedicated development and policy community of
academics and practitioners, through this report and prominently through
the papers, workshops, and case studies that go along with it
Contents
Members of the Commission on Growth and Development iv
Preface ix
Abbreviations xiii
Overview 1
Introduction 13
PART 1
Sustained, High Growth in the Postwar Period 17
What Is Growth? 17
The 13 Success Stories 19
The Art of Policy Making 28
The Role of Government 29
PART 2
The Policy Ingredients of Growth Strategies 33
High Levels of Investment 34
Technology Transfer 41
Competition and Structural Change 43
Labor Markets 45
Export Promotion and Industrial Policy 48
Exchange Rates 49
Capital Flows and Financial Market Openness 51
Macroeconomic Stability 53
Savings 54
Financial Sector Development 56
Urbanization and Rural Investment 57
Equity and Equality of Opportunity 60
Regional Development 63
The Environment and Energy Use 65
Effective Government 66
The Quality of Debate 67
Bad Ideas 68
PART 3
Growth Challenges in Specifi c Country Contexts 71
Sub-Saharan Africa 71
Small States 77
Resource-Rich Countries 80
Middle-Income Countries 82
PART 4
New Global Trends 85
Global Warming 85
Rising Income Inequality and Protectionism 91
The Rise of China and India and the Decline
of Manufacturing Prices 93
The “Adding-Up” Problem 94
The Rising Price of Food and Fuel 96
Demographics, Aging, and Migration 98
Global Imbalances and Global Governance 101
Statistical Appendix: The World Economy
and Developing Countries since WWII 105
1. Evolution of Global GDP and Per Capita GDP 107
2. Population: Trends and Forecasts 118
3. Poverty 124
4. Socioeconomic Indicators 132
5. Infrastructure 139
6. Global Trends 144
Glossary 167
Acknowledgments 171
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