Press Release of 26 October 2010

Today, the World Bank’s Chief Economist, Justin Yifu Lin, will give a guest lecture on "Growth Identification and Facilitation: The Role of the State in the Dynamics of Structural Change“ at the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE). DIE-Director Dirk Messner will give an introduction to this topic. Tilman Altenburg, Head of Department ”Competitiveness and Social Development“, will comment on the guest lecture.

Justin Yifu Lin is the World Bank’s Chief Economist and Senior Vice President. He received his PhD in economics from the University of Chicago in 1986 and is the author of 18 books and more than 100 articles in refereed international journals and collected volumes on history, development, and transition.

At the World Bank, Mr. Lin has taken a fresh look at the role of developing countries’ governments in facilitating structural change. While the Bank has traditionally been hesitant to support active economic policies by developing countries’ governments to promote growth and industrialisation, Lin recognises that in all successful economies, the state has played an important role in facilitating structural change. He proposes a balanced new approach, favouring interventions that aim to provide information, compensate for externalities, and coordinate certain investments needed to accelerate the dynamic change in the economy’s comparative advantage; at the same time, he advises against policies aimed at protecting some selected firms and industries that defy the comparative advantage determined by its endowment structure.

In 2009, the German Development Institute conducted a research project on the role of economic policies to promote growth and industrialisation in seven low and lower-middle income countries in Sub-Saharan Africa, the MENA region and East Asia. Based on this research, Tilman Altenburg will underline the relevance of Mr. Lin’s heterodox approach and address some open policy questions.