Book Reviews: High-Quality Growth
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Bibliographic details
- Authors: VIVEK ARORA
- Published: June 3, 2024
Overview
- Author of review: VIVEK ARORA, deputy director in the IMF’s Middle East and Central Asia Department.
- Publication: F&D Magazine, June 2024.
- Reading metadata from page: Less than a minute(0 words) Read.
- Reviewed book: Growth: A History and a Reckoning — Daniel Susskind, Belknap Press, Cambridge, MA, 2024, 304 pp., $29.95.
Main arguments and themes
- Susskind argues economic policy should broaden focus from aiming primarily to boost GDP growth to considering the costs of such growth as well.
- Historical view: Economic growth has brought unprecedented gains in human prosperity and well-being across the world for over two centuries.
- Emerging concerns: Climate change, inequality, and social fragmentation highlight the price of growth.
- Trade-offs: Policymakers must manage trade-offs between harnessing benefits of growth and reducing its costs; where trade-offs cannot be fully ameliorated, choices among objectives may imply accepting slower growth.
- Decision space: Susskind suggests leaving hard choices among objectives “to the world of politics.”
- Normative framing: Susskind frames arguments in terms of things “we” should do, which may assume a common set of interests across diverse populations.
Policy instruments and recommendations discussed
- Instruments Susskind suggests using:
- Taxes and subsidies
- Laws and regulations
- Social narratives and norms
- Policy goal examples:
- Induce technological progress that is more environmentally friendly.
- Provide incentives to foster growth that is less reliant on fossil fuels.
- Strategic point: Where policy cannot reconcile growth with climate and social objectives, slower growth may need to be accepted.
Critiques, limitations, and open questions
- Familiarity: Some content will not be new to economists who are already familiar with trade-offs between growth and other objectives.
- Preference heterogeneity: People’s preferences about the balance between growth and other objectives differ sharply across and within countries; Susskind does not provide a detailed framework for how policy should account for these differences when determining trade-offs.
- Polarization challenge: Finding a common view may be particularly hard in polarized environments; the book leaves some practical political-economy questions for future work.
Context and relevance
- IMF linkage: The IMF has long recognized that the quality of growth is important; quoted historical reference: In 1994, then-Managing Director Michel Camdessus urged a need for “high-quality growth that . . . is sustainable, reduces poverty and distributional inequality, respects human freedom and national cultures, and protects the environment.”
- Contribution: Susskind’s synthesis is presented as a useful addition to public discussion of growth in a longer-term context; he writes, “We must treasure the future as much as [we] revere the past.”
F&D Magazine — High-Quality Growth, VIVEK ARORA, June 2024
Content in this bundle
- Book Reviews: High-Quality Growth