Dani Rodrik

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Dani Rodrik is the Albert O. Hirschman Professor of Social Science at the Institute for Advanced Study in Princeton. Previously he was the Rafiq Hariri Professor of International Political Economy at the John F. Kennedy School of Government, Harvard University. He has published widely in international economics and globalization, economic growth and development, and political economy.

Links

A Progressive Logic of Trade [More...]
Dani Rodrik rebuts the argument that existing trade agreements are essential to reducing global poverty. "Globalization’s cheerleaders do considerable damage to their cause by framing the issue as a stark choice between existing trade arrangements and the persistence of global poverty."
Economics Rules: The Rights and Wrongs of the Dismal Science (book)
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Economics: Science, Craft, or Snake Oil? [More...]
Dani Rodrik laments that while economics has innumerable models, it has very few tools for deciding which model is appropriate. He also points out that simple answers, such as support of free trade, rely on long lists of preconditions which are seldom met.
Free-Trade Blinders [More...]
Dani Rodrik presents thought experiments to a class on globalization. He shows that justice issues play an important role in our judgements of what sorts of redistribution from free markets should be considered fair.
How the Rich Rule [More...]
"A politics based on cultural values and symbolism rather than bread-and-butter interests. When politics is waged on these grounds, elections are won by those who are most successful at “priming” our latent cultural and psychological markers, not those who best represent our interests."
Milton Friedman’s Magical Thinking [More...]
Dani Rodrik explains how Milton Friedman "blinded us to the evident reality that all successful economies are, in fact, mixed."
Rescuing Economics from Neoliberalism [More...]
A refreshing antidote to neoliberal ideology, stuffed with more excellent writing and economic ideas than are easily appreciated. "The fatal flaw of neoliberalism is that it does not even get the economics right. It must be rejected on its own terms for the simple reason that it is bad economics."
The Nation-State Reborn [More...]
Dani Rodrik points out that laissez-faire has not and cannot supplant the nation-state.
Too Late to Compensate Free Trade’s Losers [More...]
"Gone are the confident assertions that globalization benefits everyone: we must, the elites now concede, accept that globalization produces both winners and losers. But the correct response is not to halt or reverse globalization; it is to ensure that the losers are compensated."
What Does a True Populism Look Like? It Looks Like the New Deal [More...]
"If our economic rules empower corporations and financial interests excessively, then the correct response is to rewrite those rules -- at home as well as abroad. If trade agreements serve mainly to reshuffle income to capital and corporations, the answer is to rebalance them to make them friendlier to labor and society at large..."

Quotations

Globalization’s cheerleaders do considerable damage to their cause by framing the issue as a stark choice between existing trade arrangements and the persistence of global poverty[...] In fact, the most phenomenal export-oriented growth experiences to date -- Japan, South Korea, Taiwan, and China -- all occurred when import tariffs in the US and Europe were at moderate levels, and higher than where they are today[...] Progressives should not buy into a false and counter-productive narrative that sets the interests of the global poor against the interests of rich countries’ lower and middle classes. With sufficient institutional imagination, the global trade regime can be reformed to the benefit of both.
Dani Rodrik, "A Progressive Logic of Trade"
Now let the reporter go undercover as a student in the professor’s advanced graduate seminar on international trade theory. Let him pose the same question: Is free trade good? I doubt that the answer will come as quickly and be as succinct this time around. In fact, the professor is likely to be stymied by the question. “What do you mean by ‘good?’” he will ask. “And good for whom?” The professor would then launch into a long and tortured exegesis that will ultimately culminate in a heavily hedged statement: “So if the long list of conditions I have just described are satisfied, and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone’s well-being.” If he were in an expansive mood, the professor might add that the effect of free trade on an economy’s growth rate is not clear, either, and depends on an altogether different set of requirements.
Dani Rodrik , "Economics: Science, Craft, or Snake Oil?"
Every first-year graduate student learns the First Fundamental Theorem of Welfare Economics, which says essentially that provided a long list of conditions are satisfied, a market equilibrium is efficient in a particular way--that is, you cannot make someone better off without making someone else worse off. Now you can read the theorem in two, radically different ways. One is to say: "There you have it! We knew Adam Smith was right all along, but here it is stated in mathematically precise way and proved to everyone's satisfaction. Now let the government get out of the way and have the markets work their magic." The other is to say: "Wow, hold on! You mean we need so many conditions for markets to produce efficient outcomes? No externalities, no returns to scale, no market power, markets for everything and for every point in time... I better get my theorems of the second-best straight!"
Dani Rodrik, "If you are a progressive, you've got to love neoclassical economics"
The basic competitive-markets model dating back to Adam Smith has been modified over time by the inclusion, in rough historical order, of monopoly, externalities, scale economies, incomplete and asymmetric information, irrational behavior, and many other real world features.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
Chile's neoliberal experiment eventually produced the worst economic crisis in all of Latin America.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
Neoliberalism and its customary remedies -- always more markets, always less government -- are in fact a perversion of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
The fatal flaw of neoliberalism is that it does not even get the economics right. It must be rejected on its own terms for the simple reason that it is bad economics.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
Critics often point out that this emphasis on economics debases and sacrifices other important values such as equality, social inclusion, democratic deliberation, and justice. Those political and social objectives obviously matter enormously, and in some contexts they matter the most. They cannot always, or even often, be achieved by means of technocratic economic policies; politics must play a central role.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
A journalist calls an economics professor for his view on whether free trade is a good idea. The professor responds enthusiastically in the affirmative. The journalist then goes undercover as a student in the professor's advanced graduate seminar on international trade. He poses the same question: Is free trade good? This time the professor is stymied. "What do you mean by 'good?'" he responds. "And good for whom?" The professor then launches into an extensive exegesis that will ultimately culminate in a heavily hedged statement: "So if the long list of conditions I have just described are satisfied, and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone's well being." If he is in an expansive mood, the professor might add that the effect of free trade on an economy's long-term growth rate is not clear either and would depend on an altogether different set of requirements.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
There is nothing wrong with markets, private entrepreneurship, or incentives -- when deployed appropriately. Their creative use lies behind the most significant economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism's useful ideas. The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions.
Dani Rodrik, "Rescuing Economics from Neoliberalism"