Executive summary : adjusting to reality -- beyond `state versus market" in economic development

One lessons of the reforms -- surprising to some -- has been this: for markets to work well, government must work well. Successful liberalization of markets requires highly skilled public management of privatization and related policies, new efforts to protect the environment, and sophisticated regulation of newly freed capital markets and banking systems. Free markets require legal systems, grades and standards, and property rights, all of which governments help to provide. Using examples from Bolivia, Brazil, India, Indonesia, Malaysia, Pakistan, Peru, and the Philippines, the author of this study presents a practical approach to policy analysis, one that is based on two fundamental principles: (1) the proper choice of economic strategies cannot be determined in the abstract, but depends on particular circumstances, which differ not only from country to country, but also from one time period to another; and (2) information is at the heart of the problems of the developing world -- market institutions cannot work without information about prices, quantities, and quality, and government institutions cannot work without information about outcomes and outputs. (Author abstract, modified)