A Teachable Moment

by Patrick Appel

William Easterly says that the Tiger Woods scandal explodes the "Halo Effect" myth in development. Drezner is unsold and points to and article (pdf) on entrepreneurship by William Baumol to make this point:

Not everything is a necessary condition for development.  But some things are VERY IMPORTANT necessary conditions.  Without them, a country's natural endowments get used in very, very perverse ways.  It is entirely possible to have an innovative society in a corrupt state, for example -- but the question is, how does a corrupt public sector skew the incentives of entrepreneurs and inventors?