Journal Issue

Book Notices

International Monetary Fund. External Relations Dept.
Published Date:
June 1965
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Myint, Hla, The Economics of the Developing Countries, Hutchinson, London, 1964, 192 pp., 30s.; Frederick A. Praeger, New York, $5.50.

This new book by Myint is a valuable contribution to the literature of development, and is thoughtful and thought-provoking. Its theme is that even with generous aid the developing countries are inevitably confronted by difficult and painful choices in promoting their economic advance and, therefore, that it is important to bring out these choices in sharp outline.

Myint enlarges upon the need of differentiating among the developing countries according to types (overpopulated countries with a small resource base, countries with no significant population pressure as yet in relation to their resources, and so on); and the stages of development they have reached (for example, countries which still have to establish a minimum of effective government administration, those still in the early phases of development of an exchange economy, industrializing countries, and others).

Among the problems he illuminates is that of peasant-produced exports, and he shows why African countries were able to secure fairly rapid economic growth based on these exports while countries like India and Pakistan could not. He shows how mines and plantations can, if rightly handled, play the same energizing, creative role as manufacturing. But he shows, too, why they have not done this in the past. He also analyzes the various theories of critical minimum effort and the theories of balanced growth, etc.

In addition to having a great deal to contribute (or is it because he does have so much to give?), Myint’s book is especially worth noting because he has taken the time and trouble to write a short book and to write it in clear, eminently readable English.

Andrew M. Kamarck

Weil, Gordon L. (Editor), A Handbook on the European Economic Community, Frederick A. Praeger, New York, 1965, xiv + 479 pp., $7.50.

THIS BOOK was, according to its introduction, “designed to meet the need for a concise compilation of the basic EEC documents.” In this respect, it is well suited to the requirements of those who wish to begin a study of the process of decisions that have made the European Economic Community (EEC) into the powerful organization that it is today. In addition, the book should serve as an excellent reference work for those who from day to day need to find their way in the complexities of the Common Market, the achievements thus far in doing away with internal tariffs, the development of common policies for the management of the economic and social affairs of the Community, and the relations of the EEC with associated states and territories and with the rest of the world. The choice of material is such that the critical reader will detect an effort to draw up for the outsider as favorable an image of the EEC and its aims as possible. This, however, should not impair the practical usefulness of the Handbook.

Perhaps, also, the selection and presentation of statistical data illustrating the economic developments is not altogether happy. For example, it is a little disconcerting to find on page 165 some economic indicators for the Community as a whole which are partly in terms of volume and partly in terms of value; and a few pages before, a table called “Price Stability” provides a number of country indices, some of which in fact show considerable price increases in the period 1958-63. Instead of the few statistics now included, the next edition could be improved by adding a comprehensive list of the excellent statistics to be found in regular EEC publications. Finally, the bibliography is confined to official documents of the EEC available to the public; a selective list of publications about the EEC and written by outsiders would have made this Handbook even more valuable than it is in its present form.

H. Ponsen

Scitovsky, Tibor, Papers on Welfare and Growth, Stanford University Press, Stanford, California, 1964, 274 pp., $6.50.

FOR over two decades Mr. Tibor Scitovsky has been making some very stimulating contributions to various economic journals. His articles have covered a wide range of problems in economic theory and policy; many of them have been concerned in some way with economic growth and its welfare implications. In this volume, Mr. Scitovsky has collected 15 of these articles published between 1940 and 1962 together with 2 of his lectures delivered in 1963.

The essays in this volume are divided into three groups (1) Economic Growth and Related Problems, (2) Theoretical Welfare Economics, and (3) Practical Welfare Economics. In the first group, two essays are concerned with an attempt to reconcile Keynes’s employment and interest theory with the classical theory of interest and capital accumulation. These are among the earliest papers in the collection and, together with the paper entitled “A Reconsideration of the Theory of Tariffs” in the second group, they are also the longest. The treatment in these papers is formal and their interest at this time is primarily, though not entirely, historical.

The other four papers in the first part form a connected group, with the paper on “Two Concepts of External Economies” providing the foundation for the arguments in the other papers. The paper on balanced and unbalanced growth, which derives so much inspiration from the clarification of concepts achieved in the external economies paper, should be of special interest to those concerned with the problems of the less developed economies. However, it is clear from the other two papers in this group that the author’s chief interest is in the problems of the advanced industrial countries.

In all these articles, there are many propositions that provide food for thought to a reader who is more interested in the less developed countries, but it is more than obvious that those propositions are not directly applicable to their problems and that the author does not in fact have such problems principally in mind. This is not intended as a criticism but rather as a warning to the reader who might be misled, perhaps unjustifiably, by the title of the book. More important, it is intended as an expression of regret that Mr. Scitovsky has not, at least as far as these essays show, applied his mind more directly and intensively to the implications of some of his very interesting ideas for the theory of economic development in the less developed countries.

Apart from the paper on tariffs, the second group of articles in this volume includes a broad discussion of the role of welfare propositions in economics and a review of the state of welfare economics first published in 1951. There is also a rather more formal treatment of the conditions under which the assumption of profit maximization underlying the theory of pricing is likely to be valid.

The seven articles in the third part of the volume are of a basically different character. Six of them are brilliant studies of some of the features of the social and economic systems in the advanced industrial countries, the implications of which for economic theory and policy are so rarely recognized. The very titles of these papers—“Some Consequences of the Habit of Judging Quality by Price,” “Ignorance as a Source of Oligopoly Power,” and “What Price Economic Progress?” indicate their nature. All these papers are also directly concerned with the problems of the advanced industrial countries, though it is true that some of their conclusions may be equally valid in the less developed countries. The last paper in this part deals with an entirely different type of problem, being concerned with the nature of the present international payments system. All the papers in this group are much lighter reading than some of those in the first group and the paper on tariffs in the second. Yet they maintain the same high quality of analysis, which is so characteristic of Mr. Scitovsky’s work.

Hannan Ezekiel

Tun Wai, U, Tasas de interés en los países subdesarrollados, Centro de Estudios Monetarios Latinoamericanos (CEMLA), S. Juan de Letrán No. 2, Mexico, D.F., 1964, 168 pp.

THE AUTHOR, a member of the Fund staff, presents a study of the rates of interest prevailing in the money markets of 38 underdeveloped countries in Latin America, Africa, Asia, and the Middle East. Some of his comparative figures refer to the years before World War I, though the most complete information covers the period 1950-62. Much of the material was previously published in English in IMF Staff Papers, (Vol. V, 1956-57, pp. 249-78).

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