Neo-Vitality
Jan 19-2019
Poland accounted for 70% of newly created jobs in the EU last year. Such impressive achievement has something to do with the government’s application of the Neo-Structural Economic Theory propounded by Prof. Justin Lin of NSD. In 2015, the then Polish deputy prime minister clarified in an op-ed that Poland was not backsliding to the planned economy, but rather activating the government’s role in perfecting the market and building competitive advantages for industries with comparative competitiveness. That summed up well the theory that Prof. Lin put forward after finishing vice presidency at the World Bank in 2012. Some African countries and regions have also applied the theory and made fair their share of accomplishments. In a recent media interview, Prof. Lin pointed out that no developing countries had managed to catch up with the developed ones by following their theories. Neither should China’s experiences be fully copied. The rule of thumb was to focus on industries that enjoyed competitive advantages (and hence low production cost) decided by local productive endowment. Besides, the government should play its role in ensuring low transaction costs. Facing constraints, the government could make breakthrough by setting up industrial zones and special economic zones. In 1995, Prof. Lin said in an article that the 21stcentury would witness the emergence of great economists in China. The popularity of his neo-structural economic theory might be testifying to his ‘self’-fulfilling prophecy.
