(Note: This is a guest post by Feyza Ileri, who was a student in my development seminar last fall. Feyza took a course titled “Current Issues in International Trade and Economic Development” in the Department of Economics with my colleague Ed Tower. This book review was one of her assignments for Ed’s course.)
Catching Up: What LDCs Can Do and What Others Can Help
Paul Collier, Published by Commonwealth Secretariat, February 2011
80 pages, $24.95
Paul Collier, professor of economics and director of the Centre for the Study of African Economies at Oxford, has written a number of engaging and provocative books on development. Catching Up is one such book. The book focuses on the least developed countries (LDCs) and suggests a number of development strategies for the governments of those countries.
Although the LDCs’ share of the world’s population is around 12 percent, they account for less than 2 per cent of the world’s GDP. Taking this into consideration, Collier presents a guide for decision makers who aim to make LDCs attain and sustain a significant rate of growth and catch up with the middle income developing countries.
The book indicates that for the 2000-2008 period, the LDCs achieved and a 4-percent increase on average in GDP per capita GDP, an 11-percent decrease in mortality. Despite these improvements, since other developing countries have grown faster, the income differential between the LDCs and other developing countries has widened and is still widening. Moreover, Collier believes that governments hold the authority and credibility to force change. He thus offers concrete recommendations for the governments of the LDCs.
One striking point in Collier’s book is related to energy. The growth in the world economy has driven up the demand for energy. Therefore, the existence of natural resources is one of the most important opportunities for the improvement in the LDCs, Collier says. The book concentrates on the importance of investment in extraction and suggests sale of resource extraction rights in exchange for infrastructure or aid by donors.
Truth in Advertising, Game Theory Edition
Q: Looking at the flipside, was there ever a situation in which you were pleasantly surprised at what game theory was able to deliver?
A: None. Not only none, but my point would be that categorically game theory cannot do it. Maybe somewhere in a Sherlock Holmes or Agatha Christie story there was a situation where the detective was very clever and he applied some logical trick that somehow caught the criminal, something like that. You know in America there was a programme on CBS, called Numbers, written Numb3rs, with the ‘e’ reversed. Numb3rs wanted to make people curious about mathematics through detective stories. I happened to hear about it because I had done some experimental work with Amos Tversky and Dana Heller, about the game of hide and seek. In one of the episodes they refer to the paper. Of course it was a joke, but the fact that my name was mentioned in such a programme made me very happy. But outside such programmes, I categorically cannot see any case where game theory could be helpful.
That’s from The Browser’s FiveBooks interview with Tel Aviv University’s Ariel Rubinstein, one of the world’s most prominent game theorists.
We used the textbook Rubinstein wrote with Martin Osborne in the second-semester microeconomic theory course I took during the first year of my Ph.D.
I really enjoyed going through the material (especially in contrast with the second half of the course, on general equilibrium theory). Since then, however, I have been struck time and again by the limited applicability of game theory. It’s interesting that one of the world’s leading game theorists is forthcoming about that lack of applicability.