Just Get Out of the Way

Economic growth is essential for reducing poverty, and a well-functioning private sector is the only way to increase economic growth. Yet international institutions such as the World Bank and the International Monetary Fund recommend sophisticated policies to improve the business environment that governments in poor countries cannot successfully implement. The result is often a worsening of private sector performance.

In this book, Robert E. Anderson, a development consultant and former World Bank economist, recommends a different approach. Instead of adopting policies that are common in rich countries, Anderson suggests that policymakers take into account the institutional weaknesses typical of developing countries -- corruption, deficient rule of law, cronyism, and so on. Simpler, market-oriented policies are more suitable to poor countries’ institutional environments and more likely to produce growth and keep the private and public sectors honest.

Anderson recommends sometimes counterintuitive policy solutions for a number of areas—banking, privatization, corporate governance, bankruptcy, and competition. For instance, he argues that “rich countries were once poor countries” and that “examples from the past in rich countries may be more appropriate for poor countries today.”

Robert E. Anderson is an economic development expert who has extensive experience with government policies and programs to help private business. During his 10 years at the World Bank, Anderson worked on development issues in more than 15 countries.

“The message that Anderson brings is one that academic analysts, especially in Latin America, often forget: Economic growth is essential to reducing poverty in developing countries, and a dynamic private sector is indispensable to achieving growth. Governments must either offer simple and basic services that will enable enterprise—small or large—to flourish, or else they must get out of the way. Anderson illustrates these lessons with a wealth of real life examples from around the world. A must-read for anyone interested in economic development.”
—Pedro-Pablo Kuczynski, Former Economy and Finance Minister of Peru
Author, After the Washington Consensus: Restarting Growth and Reform in Latin America

“Robert Anderson clearly shows that development is accomplished only through economic growth and that growth depends on functioning market institutions.
His recognition of corruption, bureaucratic inertia, lack of technical expertise, and government’s role in the market pinpoints the key obstacles to private sector development. This book will be welcomed by those struggling to level the policy playing field and give the private sector a voice.”
—John D. Sullivan, Executive Director
Center for International Private Enterprise

“Governments that wish to help businesses in poor countries should follow the advice given to physicians: First, do no harm. Anderson is right: The best way to help the private sector is, paradoxically, not to help it.”
—Gurcharan Das, Former CEO, Procter & Gamble India
Author, India Unbound: A Personal Account of a Social and Economic Revolution from Independence to the Global Information Age