Age of Ambition: Chasing Fortune, Truth, and Faith in the New China

by Evan Osnos

At the Bank, Lin churned out a series of papers intended to “revisit” the understanding of how poor countries get rich, much if it anathema to the Washington Consensus that prevailed in the 1990s. Writing with the Cameroonian economist Célestin Monga, he argued that governments must “regain center stage.” Industrial policy, in which governments seek to support certain sectors, known to critics as “picking winners,” has a bad name in the West, he said, and for good reason: it has failed far more often than it has succeeded. But he argued that the only thing worse was not having an industrial policy. He pointed to a recent study of thirteen fast-growing economies. “In all the successful countries, the governments play a very proactive role,” he told me. He argued for a “soft” industrial policy in which a clamorous free market produced new industries and firms, and the government spotted the best prospects and helped them grow by giving them tax breaks and building infrastructure such as the ports and highways going up all over the Chinese mainland. It was the marriage of Chicago and Beijing: to rise out of poverty, he and Monga wrote, markets were “indispensable,” but government would be “equally indispensable.”