One Economics, Many Recipes: Globalization, Institutions, and Economic Growth
By Dani Rodrik
Princeton University Press £19.95, 278 pages
FT bookshop price: £15.95

Common Wealth: Economics for a Crowded Planet
By Jeffrey Sachs
Allen Lane £22, 400 pages
FT bookshop price: £17.60

Something interesting, heartening and constructive seems to be happening in the world of economics. And it’s not every day you can say that.

Debates about how countries can become rich traditionally involve ritual exchanges between the entrenched positions of interventionists wanting more government – nationalisation, regulation, trade tariff protection – and liberalisers wanting less. More recently there have been hopeful signs that the two sides have declared a ceasefire and are examining the basis for a peace treaty.

Dani Rodrik, a Harvard academic usually associated with the active-government side, has written an intriguing book, One Economics, Many Recipes. He argues that economists who agree in general about where countries should be going can conduct open and honest – and technical rather than ideological – debates about how to get there.

Part of the problem hitherto may have been a confusion of ends with means. Rodrik quotes Larry Summers, fellow Harvard academic and former US treasury secretary, to the effect that no country has failed to grow after implementing the following: integrating with the global economy through trade and investment, maintaining sound government finances, and putting in place an institutional environment that protects property rights and enforces contracts. How to get to those desirable states is another question, however. It is not as if the average African president during his or her first day in power finds a draft order on the desk saying “Integrate with global economy: yes/no? Tick one.”

Orthodox outcomes may result from unorthodox policies and vice versa. The central American state of Haiti cut its trade tariffs heavily and removed import quotas in the 1990s, while in south-east Asia, Vietnam continued with high import taxes and restrictions and extensive state intervention in the economy. Yet Vietnam is rapidly becoming the new China, foreign multinationals are investing like crazy and happily exporting; Haiti remains desperately poor and largely isolated from global trade.

Rodrik’s approach involves an eclectic, practical approach of “growth diagnostics”: trying to work out what is holding a country back – poor infrastructure? lack of education? too much regulation? – and designing responses appropriately.

Of course, this still leaves room for debate on what the right policies are. For my taste, while Rodrik admits governments can fail, he too often assumes that their interventions will be benign. His account of the Argentine financial crisis of the early 2000s, for example, is that the drastic currency regime the country adopted in 1991 failed because Asian and Brazilian financial crises later that decade blew it off course. It would be more accurate to say the Argentine government proved congenitally incapable of controlling its spending in either good times or bad. Sometimes, maintaining sound government finances is largely a question of, well, maintaining sound government finances. Still, Rodrik’s aim here is mainly to suggest a policy-making approach, not to push his own policy prescriptions. In this he deserves to succeed.

For anyone seeking a policy blueprint, try Jeffrey Sachs, once a mainstream academic economist, now head of the giant interdisciplinary Earth Institute at Columbia University and adviser to the United Nations. His latest book achieves the improbable feat of outdoing its predecessors in scope and ambition: Common Wealth is a plan for saving the planet. It takes in radical action on climate change, economic growth and development, trade, infectious disease, population, water and biodiversity.

That many of these problems are interconnected seems incontrovertible. The wisdom of Sachs’ solutions, based on test-bed “Millennium Villages” in Africa where theories of disease control and agronomy are tried out, is more uncertain.

Even to make an informed guess about whether these pilot projects will work on a continent-wide scale requires more technical and scientific knowledge than any individual possesses. But at least these books offer two valuable things: a practical plan for how to go about setting policy, and a comprehensive set of prescriptions to try out. In a field dominated for too long by arid ideology that, it seems to me, is progress.

Alan Beattie is the FT’s world trade editor