In New Structural Economics. A Framework for Rethinking Development and Policy, Justin Yifu Lin summarises the development thinking underlying the Chinese and other Asian experiences. At the core of this thinking is the importance of economic structure and structural change that requires attention to industrial upgrading. The aim of NSE is to marry the structural approach to growth with neoclassical economics, based on (a) understanding comparative advantages as the evolving potential of country’s endowment structure; (b) relying on the market as allocation mechanism at all stages of development; and (c) recognizing the facilitating role of the state in the process of industrial upgrading.
Unlike NSE, Transition Economics (TE) represents an astructural approach to growth in terms of economic structure, but it has an articulated view regarding institutional structure. Increasingly, the TE framework has emphasised the role of the state as a facilitator or enabler of economic transformation and institutional change. The notion of “structural reforms” is a key ingredient in this perspective. NSE has much less to say on the issue of “institutional structures”.
Hence, it is logical to ask: Could TE and NSE be married or complement each other? The special issue on “Transition Economics Meet New Structural Economics” published by Journal of Economic Policy Reform aims to tackle this frontier topic.
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