It has been a dismal 10 years for emerging markets, with slower growth and worsening macroeconomic imbalances. Given that the decade started with enthusiasm about BRICS (Brazil, Russia, India, China, and South Africa) and a potential decoupling of emerging markets from the crisis-ridden advanced economies, this is a sharp reversal of fortune. To better understand what went wrong, this article explores three case studies, Brazil, South Africa, and Turkey, all of which fared well in the 2000s but backslid in the 2010s. In each case, there were marked changes in macroeconomic policy, away from mainstream economics and toward a “developmental” approach, relying on expansionary policy and a larger role for the state. These experiments failed, most immediately through unsustainable borrowing and higher inflation, as well as by fomenting large-scale corruption. Although the 2010s were always likely to be more difficult than the 2000s, given slower global growth, unforced policy errors are important for understanding the scale of emerging market underperformance.

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