Economies should learn from the best
Jeffrey Sachs says for reforms to work, we could study the best practices from around the world
In many successful economic reforms, clever countries have learned from the policy successes of others. Today, too, there are some great opportunities for "policy arbitrage".
For example, while many countries are facing a jobs crisis, one part of the capitalist world is doing just fine: northern Europe, including Scandinavia, Germany and the Netherlands. All use active labour market policies, including flexi-time, school-to-work apprenticeships and job training and matching.
Likewise, in an age of chronic budget crises, Germany, Sweden and Switzerland run near-balanced budgets. All three rely on 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.
In an age of rising health-care costs, most high-income countries - Canada, the EU's Western economies and Japan - keep their total health-care costs below 12per cent of gross domestic product, with excellent health outcomes.
In an age of soaring oil costs, a few countries have made a real difference in energy efficiency. The developed countries, on average, use 160kg of oil-equivalent energy for every US$1,000 of GDP. But, in Switzerland, energy use is just 100kg per US$1,000 of GDP.
Several countries are also demonstrating how to move to a low-carbon economy. On average, the rich countries emit 2.3kg of carbon dioxide for every kg of oil-equivalent unit of energy. But France emits just 1.4kg, owing to its enormous success in deploying safe, low-cost nuclear energy.