Decentralized

Here’s an interesting piece reviewing a book that addresses how China “escaped the poverty trap.”

What has happened in China over the last few decades is truly extraordinary. In 1981 almost 90% of China’s population lived in poverty, making less than $2/day. By 2012 that number had plummeted to less than 7%. From 1990 to 2000 per capita income in China increased by 500%. From 2000 to 2010 it increased another 500%. In only 20 years China went from being extremely impoverished, to being a “middle income” nation, fast approaching “First World” status. This may be the most amazing economic turnaround in world history (even as it has come with a lot of growing pains).

I found it interesting that this analyst attributes China’s success in part to “a highly decentralized system where local government officials have a fair degree of autonomy to choose their strategies.”

The main argument for decentralized governance is that it creates opportunities for competent individuals to pursue political leadership, for societal groups to invest in building political parties, or for existing subnational governments to adopt innovative policy solutions.

This won’t come as a surprise to the economists who have long argued that organic economies are too complex to be centrally managed and that economic plans are best made by the many, not by the few.

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