Sunday, August 31, 2014

Dialogus de Beijing Consensus -- Pessimo: One final thought about Ramo's first theorem


So I'm watching the sunrise this morning, worrying about which gender I should choose (and knowing that whichever I choose, it will certainly be the wrong one), when it finally 'dawned' on me (get it?) what it is about Ramo's first 'theorem' that makes it so problematic for me.  To recap, that theorem says that:
"Rather than the “old-physics” argument that developing countries must start development with trailing-edge technology (copper wires), it insists that on the necessity of bleeding-edge innovation (fiber optic) to create change that moves faster than the problems change creates."
The problem with this, of course, is that the ability to deploy cutting-edge technology (like fiber optics) is a key indicia of development.  What Ramo ultimately seems to be saying is 'the key to development is to be developed.'  It's a circular argument.

I raise this point because I will argue that we are going to see exactly this kind of circular argument again when we look at the East Asian Model and New Development Economics.  And I'm beginning to wonder if such arguments might be a too common theme in the development agenda -- a theme that started off with 'the key to development is to act like you're developed' (see, e.g., Ramo, New Institutional Economics, the World Bank's Doing Business Reports), and when that didn't work, has since morphed into 'the key to development is to do whatever helps you to become developed.'  This latter tautology is often framed in metaphorical terms of 'experimentation'.  But as we shall see, at least in the case of China, this is a hollow metaphor:  As I shall argue a bit later, China has never engaged in anything that an meaningfully be called 'experimentation': its 'experimentation' is better analogized to a 'random walk'.   But a random-walk theory of development doesn't leave much for a developmental 'theory' to do.  Hence, the resort to circular arguments -- they are useful for making something that is not really a theory look like a theory.

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Post script:  Following Optimo's response, I now realize that this is not nearly as strong or as global a critique as I thought it was.  Never mind.

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