A. Michael Spence

A. Michael Spence is the Chairman of an Independent Commission on Growth in Developing Countries, Professor Emeritus of Management in the Graduate School of Business at Stanford University, a partner at Oak Hill Capital Partners and a Senior Fellow of the Hoover Institution at Stanford. Spence received the Nobel Prize in Economics in 2001, and the John Bates Clark Medal in 1982. He served as dean of the Stanford Business School from 1990 to 1999. From 1984 to 1990, Spence served as the Dean of the Faculty of Arts and Sciences at Harvard, overseeing Harvard College, the Graduate School of Arts and Sciences, and the Division of Continuing Education. He is a fellow of the Econometric Society and the American Academy of Arts and Sciences.

Papers Published in World Economics:

Growth Strategies and Dynamics

The paper examines the challenges that developing countries face in accelerating and sustaining growth. The cases of China and India are examined to illustrate a more general phenomenon which might be called model uncertainty. As a developing economy grows, its market and regulatory institutions change and their capabilities increase. As a result, growth strategies and policies and the role of government shift. Further, as the models of economies in these transitional states are incomplete and because models used to predict policy impacts in advanced economies may not provide accurate predictions in the developing economy case, growth strategies and policies need to be responsive and to evolve as the economy matures. This has led governments in countries that have sustained high growth to be somewhat pragmatic, to treat the policy directions that emerge from the advanced economy model with circumspection, to be somewhat experimental in seeking to accelerate export diversification, to be sensitive to risks and as a result to proceed gradually in areas such as the timing and sequencing of opening up on the current and capital account. The last is an area in which existing theory provides relatively little specific guidance, but in which there are relatively high risks that decline over time as the market matures.

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