A strange illness has overtaken the world over the past 10 years, in which elites in wealthy countries argue that prosperous societies ought to emulate the economic models of much poorer places simply because those places are growing richer at a more rapid rate. Now, rates matter a lot in life. But so do levels. As we've seen, "basketcase" Greece is much richer than China, and the challenge for China over the next two decades will be to see if it can develop institutions of governance that are up to the Greek standard. Rapid increases in Chinese wealth over the past 30 years are less about the excellence of Chinese policy than about how bad Chinese policy used to be.
The latest to succumb to the illness is Enrique Peña Nieto, new president of Mexico, who wrote in the New York Times yesterday that "Developing countries like India, China and Brazil have shown the way to significant and lasting poverty alleviation through institutional reforms and economic policies focused on growth. It’s time for these improvements to come to Mexico." Brazil, however, is modestly poorer than Mexico once you adjust for purchasing power while China and especially India are drastically poorer. China has been getting rich by becoming more like Mexico—a middle-income country with private property and corruption rather than a Maoist nightmare. In China, over a third of the labor force is still working in the agricultural sector while in Mexico it's just 10 percent. I don't have any kind of detailed economic reform agenda for Mexico, but if Mexico wants to imitate some foreign countries, it needs to imitate countries that are richer than Mexico—they could be more like Chile or more like Portugal or more like Taiwan.