Click on the thumbnail to download

Click thumbnail to download

No economy has ever been able to sustain membership in the high-income, developed-country league without having first adopted the institutions of secure private property rights and their free, competitive use under the rule of law that treats all citizens equally. These institutions (or rules) can be called the ‘software of free-market capitalism’. These basic rules of conduct make it easier for people to incur the transaction costs of innovation and to interact productively with each other in an increasingly complex, dynamic economy. Interventionism, income redistribution and crony politics weaken or destroy these essential institutions. They are therefore likely to lock the economy into a middle-income trap’, apart from creating political tensions and growing social instability. To develop the ‘software’ of economic development, social scientists and policy analysts must go beyond technical analysis and engage in moral discussions. This is a challenge that only the young in the countries concerned can tackle, if they want to create a better, freer and more prosperous future for themselves.