Stiglitz on the Mauritius Miracle

Here is a very interesting article by Joe Stiglitz, leading critic of Anglo-American capitalism and author of "Freefall: Free Markets and the Sinking of the Global Economy", all about the miracle of Mauritius.

[T]he Mauritians have increased per capita income from less than $400 around the time of independence [in 1968] to more than $6,700 today. The country has progressed from the sugar-based monoculture of 50 years ago to a diversified economy that includes tourism, finance, textiles, and, if current plans bear fruit, advanced technology.

During my visit, my interest was to understand better what had led to what some have called the Mauritius Miracle, and what others might learn from it.

What did he conclude? He emphasizes the country's investment in education, universal health care, and limited spending on defense. Oddly enough he fails to comment on its liberal trade policies, open capital market, light-touch business regulation, and low, flat taxes. Mauritius ranks 12th out of 183 in the Heritage Foundation's Index of Economic Freedom--three places behind the US, and way ahead of the next-highest-ranked country in its region (Botswana). Well, hardly worth mentioning.

He does underline one other thing:

a strong commitment to democratic institutions and cooperation between workers, government, and employers - precisely the opposite of the kind of dissension and division being engendered by conservatives in the US today.

Ouch. Point taken.

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