View Full Version : BRICs breaking?

11-02-2012, 07:54 AM
I found this interesting; others might as well...

Broken BRICs
Why the Rest Stopped Rising

Over the past several years, the most talked-about trend in the global economy has been the so-called rise of the rest, which saw the economies of many developing countries swiftly converging with those of their more developed peers. The primary engines behind this phenomenon were the four major emerging-market countries, known as the BRICs: Brazil, Russia, India, and China. The world was witnessing a once-in-a-lifetime shift, the argument went, in which the major players in the developing world were catching up to or even surpassing their counterparts in the developed world.

These forecasts typically took the developing world's high growth rates from the middle of the last decade and extended them straight into the future, juxtaposing them against predicted sluggish growth in the United States and other advanced industrial countries. Such exercises supposedly proved that, for example, China was on the verge of overtaking the United States as the world's largest economy-a point that Americans clearly took to heart, as over 50 percent of them, according to a Gallup poll conducted this year, said they think that China is already the world's "leading" economy, even though the U.S. economy is still more than twice as large (and with a per capita income seven times as high).

As with previous straight-line projections of economic trends, however-such as forecasts in the 1980s that Japan would soon be number one economically-later returns are throwing cold water on the extravagant predictions....


11-02-2012, 08:48 AM
Why Nations Fail (http://www.amazon.com/Why-Nations-Fail-Prosperity-ebook/dp/B0058Z4NR8/ref=sr_1_fkmr3_1?ie=UTF8&qid=1351845512&sr=8-1-fkmr3&keywords=why+nations+fail+-kindle) provides a great framework for thinking about these countries.

11-02-2012, 09:38 AM
In this case less a matter of why they fail than of why the overly dramatic predictions were never likely to be accurate.

I agree that institutions are important (as in Why Nations Fail), but the references one occasionally sees to man-made institutions sometimes give the impression that viable institutions are simply created, which I think is deceptive. Institutions that suit a given society typically evolve, and attempts to create or install them are likely to generate unsatisfactory results.