Will Governments Follow Good Policies?

That governments can assist in development and growth doesn't mean that governments will. The broad experience of growth in developing economies--outside of East Asian Pacific Rim, outside of OECD--has been that governments often won't. Over the past 2 decades many have argued that typical systems of regulation in developing countries have retarded development by:

• Embarking on 'prestige' industrialization programs which keep resources from shifting to activities in that the country had a long-run comparative advantage.
• Inducing entrepreneurs and firms to devote their energies to seeking rents by lobbying governments in place of seeking profits by lowering costs.
• Creating systems of regulation as well a project approval which have degenerated into extortion machines for manufacturing bribes for bureaucrats.