Free trade fallacy

Rich countries didn't follow free trade rules when they were developing. They now insist: do as we say, not as we did

By Michael Lind   82

According to the Washington consensus which governed thinking about global economic development during the 1980s and 1990s, the only way for poor countries to catch up with the US, the EU and Japan was to adopt policies of free trade and free investment. This prescription, however, produced rather discouraging results. Shock therapy failed in post-communist Russia and eastern Europe, while the liberalisation of capital flows was a big factor in the Asian financial crisis. Moreover, the data is now in and it turns out that most third world countries grew faster before they abandoned industrial policy tools like import substitution…

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