Finding the Keys to National Prosperity
Jeffrey D. Sachs
26 September 2012
NEW YORK – In many of history’s most successful economic reforms, clever countries have learned from the policy successes of others, adapting them to local conditions. In the long history of economic development, eighteenth-century Britain learned from Holland; early nineteenth-century Prussia learned from Britain and France; mid-nineteenth-century Meiji Japan learned from Germany; post-World War II Europe learned from the United States; and Deng Xiaoping’s China learned from Japan.
Likewise, in an age of chronic budget crises, Germany, Sweden, and Switzerland run near-balanced budgets. All three rely on budget rules that call for cyclically adjusted budget balance. And all three take a basic precaution to keep their entitlement spending under control: a retirement age of at least 65. This keeps costs much lower than in France, and Greece, for example, where the retirement age is 60 or below, and where pension outlays are soaring as a result.
Jeffrey D. Sachs is a professor at Columbia University, Director of its Earth Institute, and a special adviser to United Nations Secretary-General Ban Ki-Moon. His work focuses on economic development and international aid, was he was Director of the UN Millennium Project from 2002 to 2006. His books include The End of Poverty and Common Wealth