The ingredients of growth
Michael Spence, Nobel Laureate in Economics, Professor Emeritus, Stanford University, and Chairman, Commission on Growth and Development
In May 2008, the Commission on Growth and Development issued its report: The Growth Report. The Commission, dominantly political and policy leaders from developing countries, wanted to synthesize the growth experiences in a wide range of countries and research on growth strategies and policies, with a primary goal of providing a practical framework for understanding sustained high growth dynamics and for creating strategies and policies that would support that kind of growth. This brief is based on the conclusions of the report identifying the key ingredients in the known cases of sustained growth and poverty reduction. Of course every country has unique differentiating economic and political characteristics. As a result, it is now widely recognized that specific growth strategies need to be country, context and time specific. Since the report was published, a major global economic and financial crisis has engulfed the global economy. Responding to it and emerging from it with a more stable and sustainable global pattern of growth will be a major challenge. While adjustments and adaptations will be required in response to evident financial sector instability and perhaps also a heightened awareness of systemic risk and potential instability, we believe that the basic framework for sustaining high growth and inclusive development is valid and has not changed.