Lin Urges Flexibility in Fighting Poverty

from the Wall Street Journal

By ANDREW BATSON
February 29, 2008; Page A10

BEIJING -- The World Bank's new chief economist says he will push for the poverty-fighting institution to adopt a more pragmatic, trial-and-error approach.

Chinese scholar Justin Yifu Lin, the bank's first chief economist from a developing nation, has a doctorate in economics from the University of Chicago but has spent his professional life working on policy in China.

The country's long run of rapid growth is the envy of many developing nations that have struggled to match it. But Mr. Lin says China has no cookie-cutter solutions to offer poor countries and that the government's flexible approach to policy making is what is most worth emulating.

"I think that China does not follow a model. We need to change policy all the time," he says in an interview. "Your approach may be more important. If you have the wrong approach, then even if you have good intentions you can fail."

Mr. Lin says he doesn't object to the set of conventional free-market policies known as the Washington Consensus, but views them more as an idealized end that can be reached by many different means. He thinks the World Bank needs to spend more effort on designing policies that are tailored to specific local conditions. "If the World Bank wants to help the developing countries or the transitional economies, they need to come to the countries to work with the government and research institutions," he says.

Speaking in his office at Peking University, where he founded and runs the China Center for Economic Research, Mr. Lin refers frequently to strict economic concepts of incentives and comparative advantage, but also says he prefers concrete examples to theorizing. He names as influences the Nobel laureates Theodore Schultz and Robert Lucas Jr., as well as the late Chinese leader Deng Xiaoping, credited with launching the nation's reforms three decades ago.

Mr. Lin is known as a behind-the-scenes adviser to the Chinese government and has rarely taken controversial positions in public. But the research he and his center have produced has earned him admirers outside the country. Dani Rodrik, a prominent economist at Harvard University, has called Mr. Lin "an inspired choice" for the World Bank. "Justin is an institution builder," he wrote on his blog last month, and "a very good economist on top."