When tolstoy meets leontief: luck, policies, and learning from miracles

We show evidence that development miracles, such as the Asian Miracles, may not be that rare as the distribution of cross-country long-term growth follows a Power Law. We propose a growth theory, disantangling the role of policies from luck, which is consistent with this stylized fact and predicts that high growth depends on maintaining the best possible policies while not being too unlucky. We argue that miracles are all alike and every failure is a failure in its own way, suggesting that the few growth miracles hold more clues about good policies than the vast number of growth failures. We infer important implications for the study of economic development.

Automated summary

This article provides economic theories and evidence regarding development miracles and growth failures, suggesting that high growth depends on maintaining optimal policies and highlighting the value of growth miracles compared to growth failures.