Turnaround: Third World Lessons for First World Growth by Peter Blair Henry | eBook

Thirty years ago, China seemed hopelessly mired in poverty, Mexico triggered the Third World Debt Crisis, and Brazil suffered under hyperinflation. Since then, these and other developing countries have turned themselves around, while First World nations, battered by crises, depend more than ever on sustained growth in emerging markets.

In Turnaround, economist Peter Blair Henry argues that the secret to emerging countries’ success (and ours) is discipline—sustained commitment to a pragmatic growth strategy. With the global economy teetering on the brink, the stakes are higher than ever. And because stakes are so high for all nations, we need less polarization and more focus on facts to answer the fundamental question: which policy reforms, implemented under what circumstances, actually increase economic efficiency? Pushing past the tired debates, Henry shows that the stock market’s forecasts of policy impact provide an important complement to traditional measures.

Through examples ranging from the drastic income disparity between Barbados and his native Jamaica to the “catch up” economics of China and the taming of inflation in Latin America, Henry shows that in much of the emerging world the policy pendulum now swings toward prudence and self-control. With similar discipline and a dash of humility, he concludes, the First World may yet recover and create long-term prosperity for all its citizens.

Bold, rational, and forward-looking, Turnaround offers vital lessons for developed and developing nations in search of stability and growth.

Publishers Weekly

Economist Henry, dean of NYU’s Stern School of Business, tackles international macroeconomics—a hot topic among economists looking for policies to manage the debt-troubled world financial system and reverse global underperformance. Henry suggests the Third World can help guide the First World to economic recovery, if the highly industrialized world can adopt the “discipline it needs to internalize” Third World economic lessons discussed here. This premise is a stretch, but Henry does show how developing nations sometimes exhibit or are coerced into greater economic realism than G-8 countries. Henry’s survey reveals indispensable growth strategies, above all, shrinking debt and removing barriers to trade. In addition, he analyzes “inhibited investment,” “cold turkey” austerity programs, and curbing inflation. China’s “catch-up economics” and Chile’s strong-minded fiscal responsibility, benefiting the country after the 2008 global collapse, no doubt provide cautionary tales for G-8 countries. But neither nation qualifies as Third World. Henry’s efforts to draw sharp, convincing policy parallels between the Third and First World lag in a scattered conclusion. However, this readable volume still contains enough insight into global affairs and international economics to attract readers beyond universities and think tanks. Agent: Andrew Wylie, Wylie Agency. (Mar.)

From the Publisher

Turnaround weaves together a medley of history and data.... Henry's interpretation of data can be illuminating.”
—USA Today

“A thoughtful...book about the world's financial ills.... It is not an easy sale these days for governments to reduce spending, increase their revenues, and devalue currencies, but judging from Henry's very reasoned arguments and expansive case histories, it might be the only solution.”
—Booklist

“Henry...show[s] how developing nations sometimes exhibit or are coerced into greater economic realism than G-8 countries.... [T]his readable volume...contains enough insight into global affairs and international economics to attract readers beyond universities and think tanks.”
—Publishers Weekly

“A concise and controversial statement of what needs to be overcome if the world economy is to return to the path of growth and stability.”
—Kirkus Reviews

“Peter Henry had the original thought that the experiences of ‘emerging economies' may contain lessons for advanced economies. He shows that they do, but not in any crude cookie-cutter way. The vital common thread is the capacity to form a future-oriented policy and stick to it with discipline. This is why we—all of us—need grown-ups.”
—Robert M. Solow, Nobel Laureate in Economics (1987)

“A fortuitously easy-to-read guide to success tips from the ‘Third World.'”
—Darryl Lorenzo Wellington, The Crisis

“[An] impressive new book.... Turnaround is intended to instruct and Henry's argument, which I would characterize as a pitch for enlightened austerity, is straightforward.”
—Peter A. Coclanis, Charlotte Observer

“Turnaround is a welcome addition to a global development literature.... Besides providing a happy middle ground, Henry has produced one of a dwindling number of papers in the American Economic Review and can also be understood by readers who haven't passed advanced classes in statistics and algebra.”
—Charles Kenny, Washington Monthly

“Turnaround straddles the developed and developing world. It reaches conclusions that run counter to a growing sense among many Americans that globalization has hurt the U.S. economy more than it has helped, especially for the middle class.... [Henry's] strongest pitch may be a sort of technocratic optimism: the resounding belief that if developing countries can reverse a cycle of poverty and economic dysfunction and begin to grow rapidly, then the United States can, too.”
—Jim Tankersley, Washington Post

“A riveting tour of postwar world growth, replete with policy successes and devastating mistakes, Turnaround is essential reading for anyone willing to be convinced that learning should be a two-way street between advanced and developing economies.”
—Michael Spence, Nobel Laureate in Economics (2001)

“A compelling analysis of the trends that are transforming emerging markets and a practical assessment of what it all means for the global economy.”
—Kenneth I. Chenault, Chairman and CEO, American Express Company

“Tempering the ‘dismal science' with a healthy dose of optimism, Turnaround exposes sobering realities of the world economy, yet paints a hopeful picture of prosperity for the countries of Africa and, indeed, all nations.”
—Her Excellency Ellen Johnson Sirleaf, President of Liberia and Nobel Peace Laureate (2011)

“A child of the Third World risen to First World academic prominence, Peter Henry effectively bridges both worlds, offering a vision of what leaders can achieve if they take the long road, implementing sensible economic policies with accountability, integrity, and persistence.”
—Ngozi Okonjo-Iweala, Minister of Finance of Nigeria

Kirkus Reviews

Henry, dean of the NYU Stern School of Business, argues that the United States and other first-world countries should heed lessons from the developing sector. Three decades ago, Mexico defaulted on its debt and Latin America was entering its own debt crisis. The author documents how, in successive stages, they adopted policies that were the basis for major reforms. In the wake of that crisis and others, these policies became known as "the Washington Consensus" and were broadly applied during the 1997 Asian financial crisis. Henry attributes these policies to Ronald Reagan's Treasury secretary James Baker and the debt reorganization plan put forward by his successor, Nicholas Brady. In the author's view, the combination laid the foundation for successful third-world economic reforms that raised living standards and encouraged equity investment. They accepted fiscal discipline and austerity and opened their economies to the world through trade and investment. Their rejection of illusory self-sufficiency through protectionism and import substitution has proven transformative. Now, writes Henry, it is time for Washington, London and Brussels to "recognize the accomplishments of developing countries, and invite them into a new dialogue about the future of the world economy." Pointing out that the developed economies are now seeking funds from the very countries, like Brazil, on which they previously imposed restrictions, Henry suggests that developed economies "that once stood at the front of the Third World classroom [must]…take a seat and listen." If those economies are to engineer a turnaround, it will be through shared sacrifice and disciplined policies putting a shared future ahead of political expediency. A concise and controversial statement of what needs to be overcome if the world economy is to return to the path of growth and stability.

Turnaround: Third World Lessons for First World Growth

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