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Nobel winners tackle basics that China works on
By Henrique Schneider |
November 12, 2009, Thursday
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Print Edition
Print Edition
WHAT does the latest Nobel Prize in Economic Sciences mean for China?
At first sight, not much, since two US American professors, Elinor Ostrom and Oliver Williamson, were awarded the prize for their works in the realm of governance.
Neither of them did specific research on China nor made the Middle Kingdom the center of their interest. They are on to something we can best call the foundations of economics.
It is here that China enters the game: as many world economies are trying to recover after the crisis, Beijing is specifically focusing on the foundations of its system, since it is not about to reboot but to ensure steady growth.
The work of both Nobel Prize laureates deals exactly with the questions regarding governance.
There are three main areas of concentration: guaranteeing property rights, instituting the reliability of contracts and providing public goods, especially economic infrastructure.
In the last couple of years and under the premise of "harmonious development," China has tackled these three areas, focusing on its own social, political and economic stability. It has been a long struggle to enshrine the basic right of property in the regulatory system, nonetheless, it has been accepted.
China is also developing a fine-grained system of commercial law and implementing special courts dealing only within the realms of economy. Finally, economic infrastructure is the ground on which development can flourish.
Here, public infrastructure, as well as "soft factors," is relevant. China increases investment not just in roads and airports, but also in education - universities, research and development institutions and technology areas.
China is actually the country championing the development of the three areas mentioned. In time of crisis, these obvious fundamentals cannot be over stressed.
As the Nobel Prize was awarded to economists working on foundational issues, the one country doing its job there too should be recognized.
At first sight, not much, since two US American professors, Elinor Ostrom and Oliver Williamson, were awarded the prize for their works in the realm of governance.
Neither of them did specific research on China nor made the Middle Kingdom the center of their interest. They are on to something we can best call the foundations of economics.
It is here that China enters the game: as many world economies are trying to recover after the crisis, Beijing is specifically focusing on the foundations of its system, since it is not about to reboot but to ensure steady growth.
The work of both Nobel Prize laureates deals exactly with the questions regarding governance.
There are three main areas of concentration: guaranteeing property rights, instituting the reliability of contracts and providing public goods, especially economic infrastructure.
In the last couple of years and under the premise of "harmonious development," China has tackled these three areas, focusing on its own social, political and economic stability. It has been a long struggle to enshrine the basic right of property in the regulatory system, nonetheless, it has been accepted.
China is also developing a fine-grained system of commercial law and implementing special courts dealing only within the realms of economy. Finally, economic infrastructure is the ground on which development can flourish.
Here, public infrastructure, as well as "soft factors," is relevant. China increases investment not just in roads and airports, but also in education - universities, research and development institutions and technology areas.
China is actually the country championing the development of the three areas mentioned. In time of crisis, these obvious fundamentals cannot be over stressed.
As the Nobel Prize was awarded to economists working on foundational issues, the one country doing its job there too should be recognized.
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