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Leontief Prize

"Ruling Out National Development? States, Markets and Globalization"

Remarks by Neva Goodwin
to introduce the 2002 Leontief Prize recipients
at Tufts University, on November 21, 2002

I’ll just start by saying a few words about Wassily Leontief and the impact that he had on our institute before I go on to introduce our speakers. At previous ceremonies I mentioned some things about Leontief’s own life and work. This year I have a special reason to mention what he got our institute into. He was a kind of Johnny Appleseed, which is a very American image for a man who was a delightful mixture of Russian, European and American. He dropped seeds of ideas as he went through life, and one of the flowers that resulted was Microeconomics in Context. The Russian version, which was actually the second to come out -- the Vietnamese moved faster -- is one of the outcomes of an eight-year project that began when Wassily urged me to think about what kind of economics was going to be taught in Russia as it made the transition to a market economy. Neither he nor I, nor the economics teachers in Russia whom I met during the 1990s, believed that it made sense to simply translate the textbooks that were being used in the U.S. So we started from the experience of Russian teachers and students, and tried to explain their economic system as it now exists, and the variety of directions in which it might go. It was a long project, and with the nearly simultaneous appearance of the three different language versions of the result, I wanted to take this opportunity to acknowledge our debt to the seeds of inspiration and ideas that Wassily Leontief gave us.

Now turning to the contemporary policy issues that our speakers will address, I think we all are here today because we’re aware that there is no economic policy issue that elicits such fierce international debate as globalization, including the related debates over how to manage the trend towards greater international economic integration. This has been a focus of GDAE’s own work in its globalization and sustainable development program, which is contributing to the growing recognition that liberalization is not automatically bringing about either development or environmental improvement. The highly visible protests in the streets of Seattle, Washington, Prague, Quebec, Genoa, and most recently in Quito, Equator, have their counterparts in academia. The Washington Consensus has become, in the words of one of GDAE’s advisory board members Nancy Birdsall, Washington contentious.

Today we’re honoring two people who, through their rigorous empirical work on development and trade liberalization, are advancing the frontiers of economic thought. They have scrutinized the idea and the reality of free trade in the light of economic and social realities. In the process, they’re helping to rescue at least the academic discussion from a descent into ideological advocacy by asking the question that was at the core of Wassily Leontief’s own work; how is economic theory playing out in practice?

Our first speaker will be Dani Rodrik, Professor of International Political Economy at Harvard’s John F. Kennedy School of Government. He has emerged in recent years as one of the leading voices in the economics profession calling for a reexamination of the rush towards liberalization in trade and capital markets. In a recent sweeping review of the literature on the subject, he and his colleagues have shown that the empirical relationship between economic integration and development is not as tight as some suggest. He argues convincingly that free trade proponents overemphasize economic integration at the expense of poverty reduction and economic growth. He also crosses the normal boundary line of disciplines, to examine government roles and the intriguing question of why some governments are better at making economic policy than others. Among the many activities that indicate the range of his interests and his influence, Professor Rodrik is an advisor to the Central Bank of the Republic of Turkey and was a fellow of the World Economic Forum in Davos in 2000. To mention only a few of his publications, recent books include Making Openness Work: The New Global Economy and the Developing Countries and Has Globalization Gone Too Far?

[I would like to invite Dani Rodrik to come to the stage so that Bill and I can give you the two things that an academic institution such as ours can give, which is to say books. This is one of the sets of our Frontier Issues, and of course the recognition of this award.]

Thank you very much for a very provocative and interesting talk. There’s a tremendous complimentarity between the work of our two award recipients today, Alice Amsden the Barton T. Weller Professor of Political Economy at MIT, is perhaps best known for her recent work on the role of the state in newly industrializing countries. Her 2001 book, The Rise of “the Rest”: Challenges to the West from Late-Industrializing Economies, highlights the importance of an active state in promoting industrialization; a perspective which challenges many of the tenants of mainstream development institutions. She has shown that the paths followed by some of the countries that have achieved a significant level of industrial development such as Korea and Taiwan, did so with a strategic blend of non-market and market approaches. But she argues, it is becoming more and more difficult to chart such a path under the emerging rules for the global economy as dictated by the World Trade Organization and the international financial institutions.

Every year the Scientific American names fifty “visionaries from the worlds of research, industry and politics whose recent accomplishments point toward a brighter technological future for everyone”. This year Alice Amsden received a Scientific American Fifty Award under the category manufacturing. The other two winners in this category were developers of computer technology. What Alice Amsden has contributed in this area is to help manufacturers understand the world in which they operate as a part of the light that she had shed for all of us on the overall economic system that includes manufacturing. We’re eager to hear what she has to say to us this afternoon, Alice please come up and we will make our presentations.

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