The subject we address in the first paper in the Policy Programme for Prosperity series is the international evidence on how countries can achieve an economic transformation. We all know that economic transformation is difficult. Indeed, there is widespread pessimism about British governments ever being able to achieve anything at all. Yet there are a number of examples of countries being able to deliver just this. These cases are often trotted out as examples that the UK should follow. So, a study of these experiences is a good place to start our review of a detailed economic policy programme for the UK. If they can do it, why can’t we?

This study of different countries’ experience of transformation examines the following examples:

1. Mrs Thatcher’s Britain – Turning the Country Round: 1983-2007.
2. Germany after the War – The German Economic Miracle: 1945- 1973.
3. France after the War – The Thirty Glorious Years: 1945-1973.
4. Ireland – “The Celtic Tiger”: 1981-2020.
5. Poland – From Communism to the Market Economy: 1990-2020.
6. South Korea – Interventionism plus Competition: 1963-2007.
7. Hong Kong – The Free Market Rules: 1962-1988.
8. Singapore – Capitalism with Socialist Characteristics: 1959-2007.

The episodes of economic transformation that we have examined are purposely both diverse and distinctly different in economic circumstances from those that confront the UK today. Because of these differences, unsurprisingly, there is no single blueprint that emerges for the UK to follow. Nevertheless, there are some key lessons that might be drawn for the present, particularly when it comes to the politics of initiating a programme of reform and maintaining it over time:

• Lesson 1: A strategy is needed, but not necessarily a plan.
• Lesson 2: Drop the search for a silver bullet: there needs to be a package of measures.
• Lesson 3: Fiscal prudence is usually a necessary but insufficient condition for transformation.
• Lesson 4: Low inflation helps, but on its own it is not decisive.
• Lesson 5: Tax can matter critically – not always, but often.
• Lesson 6: High rates of investment are usually critical: except temporarily, this requires high rates of national saving.
• Lesson 7: Competition is the key driver of efficiency: openness to international trade is a major element, but not the only one.
• Lesson 8: Once the basics of sound macro policy are in place, the reform agenda must be focused on a series of micro measures.
• Lesson 9: Leadership is crucial: but success requires more than just one key individual.
• Lesson 10: Early successes and a clear vision for the future are key to retaining political support.