Lin, Justin Yifu

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Last updated: January 31, 2023
Justin Yifu Lin is the former World Bank Chief Economist and Senior Vice President, Development Economics. In his capacity, Mr. Lin guided the Bank’s intellectual leadership and played a key role in shaping the economic research agenda of the institution. Building on a distinguished career as one of China’s leading economists, Mr. Lin is undertaking an ambitious research program that examines the industrialization of rapidly developing countries and sheds new light on the causes of lagging growth in poor regions. He took up his World Bank position on June 2, 2008, after serving for 15 years as Professor and Founding Director of the China Centre for Economic Research (CCER) at Peking University.
Citations 40 Scopus

Publication Search Results

Now showing 1 - 10 of 48
  • Publication
    Annual World Bank Conference on Development Economics—Global 2011 : Development Challenges in a Postcrisis World
    (Washington, DC: World Bank, 2013-10-11) Sepúlveda, Claudia; Harrison, Ann; Lin, Justin Yifu; Sepúlveda, Claudia; Harrison, Ann; Lin, Justin Yifu
    This volume presents papers from a global gathering of the world’s leading development scholars and practitioners held May 31 - June 2, 2010. Paper themes include: Environmental Commons and the Green Economy, Post-crisis Development Strategy, the Political Economy of Fragile States, Measuring Welfare, and Social Programs and Transfers. Keynote addresses: Elinor Ostrom: Overcoming the Samaritan's Dlimemma in Development Aid -- Torsten Persson: Weak States, Strong States, and Development -- Joseph Stiglitz: Learning, Growth, and Development -- Partha Dasgupta: Poverty Traps
  • Publication
    The Rejuvenation of Industrial Policy
    (World Bank, Washington, DC, 2013-09) Stiglitz, Joseph E.; Lin, Justin Yifu; Monga, Célestin
    This essay is about an important area in which there has been major rethinking -- industrial policy, by which the authors mean government policies directed at affecting the economic structure of the economy. The standard argument was that markets were efficient, so there was no need for government to intervene either in the allocation of resources across sectors or in the choices of technique. And even if markets were not efficient, governments were not likely to improve matters. But the 2008-2009 global financial crisis showed that markets were not necessarily efficient and, indeed, there was a broad consensus that without strong government intervention -- which included providing lifelines to certain firms and certain industries -- the market economies of the United States and Europe may have collapsed. Today, the relevance and pertinence of industrial policies are acknowledged by mainstream economists and political leaders from all sides of the ideological spectrum. But what exactly is industrial policy? Why has it raised so much controversy and confusion? What is the compelling new rationale that seems to bring mainstream economists to acknowledge the crucial importance of industrial policy and revisit some of the fundamental assumptions of economic theory and economic development? How can industrial policy be designed to avoid the pitfalls of some of the seeming past failures and to emulate some of the past successes? What are the contours of the emerging consensus and remaining issues and open questions? The paper addresses these questions.
  • Publication
    Financial Structure and Economic Development : A Reassessment
    (Oxford University Press on behalf of the World Bank, 2013-09) Cull, Robert; Demirgüç-Kunt, Asli; Lin, Justin Yifu
    In this article the authors use quantile regressions to assess the relationship between economic and financial development at each percentile of the distribution of economic development. Thus; the quantile regressions provide information on how the associations between economic development and both bank and securities market development change as countries grow richer.
  • Publication
    Leading Dragon Phenomenon : New Opportunities for Catch-up in Low-Income Countries
    (Asian Development Bank and Asian Development Bank Institute, 2013-03) Chandra, Vandana; Lin, Justin Yifu; Wang, Yan
    Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy. Since the 18th century, all countries that industrialized successfully have followed their comparative advantages and leveraged the latecomer advantage, including emerging market economies such as the People's Republic of China (PRC), India, and Indonesia. The current view is that Chinese dominance in manufacturing hinders poor countries from developing similar industries. We argue that rising labor cost is causing the PRC to graduate from labor-intensive to more capital-intensive and technology-intensive industries. This will result in the relocation of low-skill manufacturing jobs to other low-wage countries. This process, which we call the “leading dragon phenomenon,” offers an unprecedented opportunity to low-income countries. Such economies can seize this opportunity by attracting the rising outward foreign direct investment flowing from Brazil, the PRC, India, and Indonesia into the manufacturing sectors. All low-income countries can compete for the jobs spillover from the PRC and other emerging economies, but the winner must implement credible economic development strategies that are consistent with its comparative advantage.
  • Publication
    Explaining Africa’s (Dis)advantage : The Curse of Party Monopoly
    (World Bank, Washington, DC, 2013-01) Harrison, Ann E.; Lin, Justin Yifu; Xu, L. Colin
    Africa's economic performance has been widely viewed with pessimism. This paper uses firm-level data for 89 countries to examine formal firm performance. Without controls, manufacturing African firms do not perform much worse than firms in other regions. But they do have structural problems, exhibiting much lower export intensity and investment rates. Once the analysis controls for geography and the political and business environment, formal African firms robustly lead in sales growth, total factor productivity levels and productivity growth. Africa's conditional advantage is higher in low-tech than in high-tech manufacturing, and exists in manufacturing but not in services. While geography, infrastructure, and access to finance play an important role in explaining Africa's disadvantage in firm performance, the key factor is party monopoly. The longer a single political party remains in power, the lower are firm productivity levels, growth rates, and sales growth for manufacturing. In contrast, the business environment and firm characteristics (except for foreign investment) do not matter as much. The paper also finds evidence that the effects of the political and business environment are heterogeneous across sectors and firms of various levels of technology.
  • Publication
    Explaining Africa's (Dis)advantage
    (World Bank, Washington, DC, 2013-01) Harrison, Ann E.; Lin, Justin Yifu; Xu, L. Colin
    Africa's economic performance has been widely viewed with pessimism. In this paper, firm-level data for around 80 countries are used to examine formal firm performance. Without controls, manufacturing African firms perform significantly worse than firms in other regions. They have lower productivity levels and growth rates, export less, and have lower investment rates. Once geography, political competition and the business environment are controlled for, formal African firms lead in productivity levels and growth. Africa's conditional advantage is higher in low-tech than in high-tech manufacturing, and exists in manufacturing but not in services. The key factors explaining Africa's disadvantage at the firm level are lack of infrastructure, access to finance, and political competition.
  • Publication
    Solving the Mystery of African Governance
    (Taylor and Francis, 2012-11-29) Lin, Justin Yifu
    The dominant view of good governance as a pre-condition for economic success is theoretically compelling but empirically difficult to establish. Historical analyses tend to indicate a very strong correlation between institutional development and economic growth. Today’s high-income and good-governance countries generally had bad-governance environments at low levels of income. Moreover, some of today’s most successful economies still exhibit sub-optimal governance indicators. By focusing on the search for the determinants of some global governance standards that often reflect particular political, ideological and philosophical conceptions of power, the traditional literature on governance has so far failed to offer a set of actionable policies that poor countries could implement to foster inclusive growth in a pragmatic and incentives-compatible way. This article acknowledges that governance problems are indeed major impediments to economic growth. But contrary to conventional wisdom, it argues that the well-known governance problems in African countries are mainly the reflection of their low level of development, and the results of failed state interventions and distortions originating from erroneous economic development strategies. Instead of posing ‘good’ governance as the main prescription and a prerequisite for sustained growth, development economists should design policy frameworks that offer the maximum likelihood of success because they are consistent with comparative advantage while providing minimum opportunities for rent-seeking and state capture.
  • Publication
    Demystifying China’s Fiscal Stimulus
    (World Bank, Washington, DC, 2012-10) Fardoust, Shahrokh; Lin, Justin Yifu; Luo, Xubei
    China's government economic stimulus package in 2008-09 appears to have worked well. It seems to have been about the right size, included a number of appropriate components, and was well timed. Its subnational component was designed to maximize the impact of the stimulus package on the economy and minimize the potential procyclical elements that are usually built into subnational fiscal mechanisms in federal countries. Moreover, China's massive fiscal stimulus played an important role in the overall recovery of the global economy. Using a simple analytical framework, this paper focuses on two key factors behind the success of the stimulus: investments in bottleneck-easing infrastructure projects and countercyclical nature of subnational spending based on the assumption that well-chosen infrastructure projects could improve business climate and thereby crowd in the private investment. The paper concludes that the expansionary subnational government spending played a key role in strengthening the overall impact of the stimulus and sustaining growth. It also highlights the importance of public investment quality and cautions about the sustainability of local government financing through the domestic banking system and increases in local governments off balance sheet or contingent liabilities. These lessons may be of particular relevance today for China, as well as other countries, in formulating policy response to another global economic slowdown or crisis, possibly as a result of the Eurozone turmoil. For China, investing in urban infrastructure and green economy, as well as in higher quality and better targeted social services, will be crucial for improving income inequality and inducing a more inclusive growth path.
  • Publication
    Learning from China's Rise to Escape the Middle-Income Trap : A New Structural Economics Approach to Latin America
    (World Bank, Washington, DC, 2012-08) Lin, Justin Yifu
    This paper discusses the causes of the middle-income trap in Latin America and the Caribbean, identifies the challenges and opportunities for Latin America that come from China's rise, and draws lessons from New Structural Economics and the Growth Identification and Facilitation Framework to help Latin America escape the middle-income trap. Countries in Latin America and the Caribbean are caught in a middle-income trap due to their inability to structurally upgrade from low value-added to high value-added products. Governments in Latin America and the Caribbean should intervene in industries in which they have a comparative advantage, calibrating supporting policies in close collaboration with the private sector through public-private sector alliances. Through continuous structural upgrading in sectors intensive in factors such as natural resources, scientific knowledge, and unskilled labor, the region could achieve dynamic growth. This would require investments in education, research and development, and physical infrastructure. Therefore, industrial upgrading and diversification would be essential to avoid further de-industrialization arising from the competitive pressures of the rise of China, broaden the base for economic growth, and create the basis for further sustained reduction in unemployment, poverty and income inequality. Failure to do so would lead to a loss of competitiveness and risks of further de-industrialization.
  • Publication
    Shifting Patterns of Economic Growth and Rethinking Development
    (Taylor and Francis, 2012-07-30) Lin, Justin Yifu; Rosenblatt, David
    This paper provides an historical overview of both the evolution of the economic performance of the developing world and the evolution of economic thought on development policy. The twentieth century was broadly characterized by divergence between high-income countries and the developing world, with only a limited number (less than 10% of the economies in the world) managing to progress out of lower or middle-income status to high-income status. The last decade witnessed a sharp reversal from a pattern of divergence to convergence – particularly for a set of large middle-income countries. The latter phenomenon was also driven by increasing economic ties among developing countries and, on the intellectual scale, increased knowledge generation and sharing among the developing countries. Re-thinking development policy implies confronting these realities: twentieth century economic divergence, the experience of the handful of success stories, and the recent rise of the multi-polar growth world. This paper provides descriptive data and a literature survey to document these trends.