The Growth Commission’s reports identify the ingredients that, if used in the right country-specific recipe, can deliver growth and help lift populations out of poverty. The Commission, consisting of 19 experienced leaders and 2 Nobel prize-winning economists, has released several commission reports, thematic volumes, and background working papers. The spring 2010 volume is the final book from the Commission. The Commission is succeeded by The Growth Dialogue.
(World Bank, Washington, DC, 2009) Hofman, Bert; Wu, Jinglian
China's remarkable economic
performance over the last 30 years resulted from reforms
that met the specific conditions of China at any point in
time. Starting with a heavily distorted and extremely poor
economy, China gradually reformed by improving incentives in
agriculture, phasing out the planned economy and allowing
non-state enterprise entry, opening up to the outside world,
reforming state enterprises and the financial sector, and
ultimately by starting to establish the modern tools of
macroeconomic management. The way China went about its
reforms was marked by gradualism, experimentation, and
decentralization, which allowed the most appropriate
institutions to emerge that delivered high growth that by
and large benefited all. Strong incentives for local
governments to deliver growth, competition among
jurisdictions, and strong control of corruption limited rent
seeking in the semi reformed system, whereas investment in
human capital and the organizations that were to design
reforms continued to provide impetus for the reform process.
Learning from other countries' experience was
important, but more important was China's adaptation of
that experience to its own particular circumstances and needs.
(World Bank, Washington, DC, 2009) Gordon, Roger H.
Low tax revenue and slow economic growth
are two central concerns in developing countries. However,
policies that raise tax revenue also harm economic growth.
With tax revenue coming mainly from large capital-intensive
firms, and with a large informal sector, policies that aid
large firms and policies that discourage entry of new firms
both help increase tax revenue. Entrepreneurial activity as
a result is discouraged, lowering growth. There is a basic
tension in policy design between current tax revenue and
economic growth. In fact, a loss in tax revenue can itself
reduce growth, due to less spending on education and
infrastructure. It can also undermine political support for
the reforms from the poor and from government bureaucrats,
both of whom are key beneficiaries of government
expenditures. What policies encourage growth without undue
loss of current expenditures? One is debt finance, but this
creates the risk of a financial crisis if tax revenue rises
too slowly to repay this debt. A second is user fees, but
such fees still undermine political support from the poor. A
third is partial reform, maintaining both higher taxes on
and some protection for easily taxed firms, even while
barriers to entry are eased.