Left behind A new economics for neglected places

In this stimulating inquiry, Collier (The Future of Capitalism), a public policy professor at Oxford University, explores how to turn around the fortunes of economically distressed regions. Cautioning against putting too much stock in any single approach, Collier argues that in the 1980s American and British legislators' unfounded confidence in Milton Friedman's monetary ideas caused currency appreciation that resulted in the deindustrialization of such steel towns as Pittsburgh and South Yorkshire. Instead, Collier encourages lawmakers to experiment with what strategies work for their locale, discussing how Chinese statesman Deng Xiaoping transformed his country's economy by assigning a party chief to each of China's 40 districts, requiring each chief to devise methods for meeting a variety of civic goals, and then spreading successful strategies to other districts (though it's an oversight that Collier doesn't discuss what some of those strategies were). Still, the case studies do a competent job of illuminating the myriad factors that contribute to a region's prosperity (or lack thereof), and the takeaways are relatively straightforward. For instance, Collier illustrates the big difference that "little platoons" can make by describing how a group of six people formed the Spanish worker cooperative Mondragon in 1956, which has since grown into a powerhouse that's transformed the Basque region's economy. It's a thought-provoking complement to Nick Romeo's The Alternative. (Aug.)

A political and economic plan for bringing inclusive prosperity to places suffering from poverty and despair. As a development economist, Collier, author of The Bottom Billion, The Plundered Planet, and other notable books, attends to how countries and regions, locked in a spiral of economic decline, can reverse their fortunes. Drawing on research and his consultancy experiences, he proposes a "middle way" between a market fundamentalism, which believes that "the market knows best" and that government should "follow wherever private investment leads," and international assistance by such entities as the World Bank, which takes a one-size-fits-all approach to development. While a thriving economy is the goal, Collier mainly focuses on the importance of governmental and grassroots leadership that can bolster locally emergent economic activity, engage in rapid learning, and foster a shared identity. "Social psychology…provides insights into how a left-behind community can catch up by forging new common purposes," he writes. Of critical importance for governments is the capacity to tax and the presence of a security apparatus that thwarts corruption. These conditions enable growth-inducing policies that elevate peoples' lives. The author offers a variety of examples to illustrate these ideas. Some countries and regions, such as Tanzania, Estonia, Singapore, and the Basque region of Spain, have achieved success in (re)building their economies. Others, such as Malawi, Afghanistan, South Africa, and Somalia, have faltered and continue to suffer from widespread poverty and dysfunctional governments. Throughout the book, Collier meanders from example to example, staying only just long enough to make a point, and from idea to idea, never fully coalescing the argument. Surprisingly, given his academic discipline, the author avoids delving into alternative approaches to economic development--although he devotes a chapter to the perils of relying on natural resources. Hopeful advice for overcoming the uneven development endemic to capitalism and the governments in thrall to it. Copyright (c) Kirkus Reviews, used with permission.