Abstract
The policy prescriptions of the Cambridge Economic Policy Group (CEPG) for the United Kingdom are well known. They involve all-round protection of British industry that would allegedly permit reaching simultaneously higher output levels, lower unemployment rates, and lower inflation rates. Since first presented in February 1975, the views of the Cambridge Group have been several times and have been repeatedly subjected to criticism.1
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Notes
The theory underlying the policy prescriptions of the Cambridge Group was explicited in F. Cripps and W. Godley, ‘A Formal Analysis of the Cambridge Economic Policy Group’s Model,’ Economica, XLIII (1976)
The most cogent criticism of CEPG views is provided in M. F. G. Scott, W. M. Corden, and I. M. D. Little, The Case against General Import Restrictions, Thames Essay No. 24 (London: Trade Policy Research Centre, 1980).
All citations in this section are from A. Singh, ‘The Interrupted Industrial Revolution of the Third World: Prospects and Policies for Resumption,’ Industry and Development, XII (1984) pp. 43–68, which provides a comprehensive exposition of CEPG policy prescriptions for developing countries.
W. A. Lewis, ‘The Slowing Down of the Engine of Growth,’ American Economic Review, LXX (1980) pp. 555–64. At the same time, it should be emphasized that Lewis, like Nurkse before him, did not recommend that the LDCs adopt protectionist policies. Lewis also counselled against preferential arrangements among LDCs.
J. Riedel, ‘Trade as the Engine of Growth in Developing Countries, Revisited,’ Economic Journal, XLIV (1984) p. 65.
B. I. Cohen, and D. G. Sisler, ‘Exports by Developing Countries in the 1960’s,’ Review of Economics and Statistics, LIII (1971) pp. 354–61.
R. C. Porter, ‘Some Implications of Postwar Primary-Product Trends,’ Journal of Political Economy, LXXVIII (1970) pp. 586–97.
The estimates are based on the sources cited in B. Balassa, ‘Trends in International Trade in Manufactured Goods and Structural Change in the Industrial Countries,’ in L. Pasinetti and P. Lloyd (eds), Structural Change, Economic Interdependence and World Development Vol. 3 Structural Change and Adjustment in the World Economy (London: Macmillan, 1987) pp. 123–48.
Essay 18 in Bela Balassa, Change and Challenge in the World Economy (London: Macmillan, 1985) pp. 403–26.
J. Love, ‘External Market Conditions, Competitiveness, Diversification and LDC Exports,’ Journal of Development Economics, XVI (1984) pp. 279–91.
B. Balassa, ‘Export Incentives and Export Performance in Developing Countries: A Comparative Analysis,’ Weltwirtschaftliches Archiv, CXI (1978) pp. 43–5. The data cited in the following also originate in this paper.
B. Balassa, ‘Exports, Policy Choices, and Economic Growth in Developing Countries After the 1973 Oil Shock,’ Journal of Development Economics, XVIII (1985) pp. 25–35.
B. Balassa, ‘Economic Reform in China,’ Banca Nazionale del Lavoro, Quarterly Review (1982) p. 309 and Essay 14 in B. Balassa Change and Challenge in the World Economy, pp. 310–36.
W. R. Cline, ‘Can the East Asian Export Model be Generalized?’ World Development, X (1982) pp. 71–80; the work of Nayyar, published in the Economic and Political Weekly in Bombay, represents a less serious effort and will not be considered here.
B. Balassa, ‘The Newly-Industrializing Developing Countries After the Oil Crisis,’ Weltwirtschaftliches Archiv (1981) pp. 142–94.
T. Barker, and V. Brailowsky, ‘Mexican Economic Policy 1978–82 and the National Development Plan’ (Mexico, DF, 1983) mimeo, p. 28.
B. Balassa, ‘Trade Policy in Mexico,’ World Development (1983) pp. 795–812 and Essay 17 in Change and Challenge in the World Economy, pp. 384–99.
F. O. Jimenez Jaimes, and C. Schatán, ‘Mexico: la nueva politica comercial y el incremento de las importaciónes de bienes manufacturados en el périodo 1977–80’ (Mexico, DF: El Colegio de Mexico, 1982) mimeo.
J. Eatwell, and A. Singh, ‘Se encuentra ‘sobrecalentada’ la económia mexicana? Un analisis de las problemas de politica económica a corto y mediano plazos’ (Mexico, DF, 1981) mimeo, p. 12.
A. Singh, ‘The Present Crisis of the Mexican Economy: From a Mexican Perspective’ (Cambridge, England, 1983) mimeo, p. 1; published in an abbreviated form in ‘How the Bankers’ Darling Fell on Hard Times,’ South, XXV (1982) pp. 25–7.
T. O. Enders, and R. P. Mattione, ‘Latin America. The Crisis of Debt and Growth,’ Studies in International Economics (Washington, DC: Brookings Institution, 1984).
K. W. Clements, and L. A. Sjaastad, How Protection Taxes Exporters, Thames Essay No. 39 (London: Trade Policy Research Centre, 1984).
A. Singh, ‘The “Basic Needs” Approach to Development in the New International Economic Order,’ World Development, VII (1979) pp. 600–601.
A. Coulson, Tanzania. A Political Economy (Oxford: Clarendon Press, 1982).
S. M. Wangwe, ‘Industrialization and Resource Allocation in a Developing Country: The Case of Recent Experiences in Tanzania,’ World Development, XI (1983) pp. 483–92.
U. Lele, ‘Tanzania: Phoenix or Icarus?,’ in A. C. Harberger (ed.), World Economic Growth (San Francisco; Institute for Contemporary Studies, 1984).
A. Singh, ‘The Continuing Crisis of the Tanzanian Economy: The Political Economy of Alternative Policy Options’ (Cambridge, England, 1984) mimeo, p. 11.
B. Balassa, ‘Adjustment Policies and Development Strategies in Sub-Saharan Africa, 1973–1978,’ in M. Syrquin, L. Taylor, and L. E. Westphal (eds), Economic Structure and Performance (Orlando: Academic Press, 1984) p. 328.
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Balassa, B. (1989). The Cambridge Group and the Developing Countries. In: New Directions in the World Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-10588-5_4
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