An Economic Facelift.docVIP

An Economic Facelift 　　As developing countries around the world continue to face harsh economic challenges， a new approach to changing the status quo has become imperative. Enter New Structural Economics （NSE）， an enlightened theory put forward by Justin Yifu Lin， former World Bank chief economist and present honorary Dean of Peking University’s National School of Development. 　　Lin says economic development is a process of continuous structural change. Whereas in the past， economic theories always used high-income countries as the reference， NSE proposes the opposite. He advises developing countries to look at what they have now， what they can do well， and how to create the conditions to scale that up. Lin shares his thoughts on his theory and how it can be applied to African countries in an exclusive interview with ChinAfrica， a monthly publication of Beijing Review. 　　ChinAfrica： What are the main aspects of your New Structural Economics （NSE） theory？ 　　Justin Yifu Lin： Development economics is a new sub-discipline in modern economics； it did not appear until the post-World War II period. At that time， many countries were in the process of post-war reconstruction. Many developing countries had got their political independence and started their own modernization drive. We needed to have a theory to guide those efforts. That was the origin of development economics. 　　We call the first edition of development economics structuralism. At the time， the understanding was that if a developing country wanted to catch up with a high-income country， their income per household should be the same as high-income countries’. But to reach that， you should have the same labor productivity. If you wanted to have the same labor productivity， you needed to have the same advanced industries. 　　Developing countries were unable to develop those kinds of industries. And so [structuralists’] advice was [for the] government [to intervene] to compensate for the market. The intent