Rejoinder to “A Response to Fine’s ‘Harvard Group Shores up Shoddy Governance’”

First and foremost, whatever comes next, Hausmann and Andrews, H&A, are to be congratulated for accepting the opportunity to respond to my critique of their work, Fine (2008a). This is most welcome, and relatively rare in the troubled history of debates over economic policy for the post-apartheid economy. It has long been non-negotiable, let alone subject to debate, from the side associated with government (and World Bank and IMF before that). It is apparent that differences of both method and substance are involved, and it can only be beneficial if these are clarified and acted upon. However, their response is long, self-admittedly goes over ground that is already covered in the original reports (which is the easiest thing for them to do), overlooks much of my criticism (without explicitly accepting it, ditto),² and misinterprets almost as much as it overlooks (inexcusable in some instances and evidence of extreme and incomprehensible carelessness).

In order, possibly, to give the Panel (or team) some credibility and as a reaction against my own extremely harsh opening, H&A begin by reporting that, “About one third of the team was South African and over two thirds hailed from developing countries” (31).³ This may have been unwise on their part as it opens the tiniest crack in any sort of pretence that this is simply an academic debate, a theme to which they return in their conclusion as they represent themselves as Cassandra-like purveyors of some truths that are being denied by the politically motivated. So it is to some extent about who is advising whom and how this might have some influence on what is said, and what is the background credibility with which they say it. Let me prise this crack wide open. Initially at least, H&A fail to mention that only five of the team of twenty-nine are located in developing country universities, three of these at UCT plus Stephen Gelb as far as the South African input is concerned, and more than two-thirds hail from the United States. The presence of blacks and women is marginal if not token (especially in terms of authorship). Much later, though, H&A somewhat bizarrely claim that this provides some sort of evidence in favour of giving the highest priority to the attraction and retention of internationally mobile, highly skilled labour in South Africa. Thus, “of the 16 members of the IGAP that are affiliated with universities in the United States, only three were born in that country: openness to global talent is potentially an important source of growth” (56).

This is truly tricky territory. I am reminded of my review of almost a decade ago of similar claims emanating from the World Bank – that the marginal productivity of its researchers was fifteen times its cost, Fine (2002). This meant that if World Bank staff and remuneration had been doubled over the next four years (salaries to act as a screening device to improve their quality even more), and allowing for a bit of endogenous growth, world GDP would have been tripled by now. In current times of financial crisis, laissez-faire policies with which most US academic economists have been at least complicit, those claiming that being affiliated as an economist to a university in the United States is a source of growth might expect to be in receipt of short shrift, even if departing from free market ideology.⁴ In addition, last time I looked, economics was deeply unpopular in that country, with the number of doctoral students of domestic origin falling but overall numbers rising, explaining not only the Americanisation of economics across the world but also within the United States itself, Fine and Milonakis (2009), of which Hausmann and colleagues are illustrative. Significantly, I like to claim that neither Japan nor South Korea had any (mainstream) economists during their industrialisation. South Korea did not even know it was a developmental state until it was told so by the west. Is it an accident that the downturn in their fortunes should coincide with...