I Do What I Do

by Raghuram G. Rajan

While it would be churlish to deny that many poor countries have made tremendous progress in creating the conditions for sustained growth, it doesn’t serve the citizens of poor countries either if we say that all the problems of the past are well and truly in the past. While no one has the ‘magic bullet’ for growth, there are some things that do seem important. These include sensible macroeconomic management, with fiscal discipline, moderate inflation, and a reasonably competitive exchange rate; laws and policies that create an environment conducive to private sector activity with low transaction costs; and an economy open for international trade. In addition, investments in health and education, which create a population that not only lives a better life but also sees opportunities in growth and competition, ought to be encouraged.