NEW YORK In many of historys most successful economic reforms, clever countries have learned from the policy successes of others, adapting them to local conditions. In the long history of economic development, eighteenth-century Britain learned from Holland; early nineteenth-century Prussia learned from Britain and France; mid-nineteenth-century Meiji Japan learned from Germany; post-World War II Europe learned from the United States; and Deng Xiaopings China learned from Japan.
In an age of rising health-care costs, most high-income countries Canada, the European Unions Western economies, and Japan manage to keep their total health-care costs below 12% of GDP, with excellent health outcomes, while the US spends nearly 18% of GDP, yet with decidedly mediocre health outcomes. And, Americas is the only for-profit health system of the entire bunch. A new report by the US Institute of Medicine has found that Americas for-profit system squanders around $750 billion, or 5% of GDP, on waste, fraud, duplication, and bureaucracy.
In an age of soaring oil costs, a few countries have made a real difference in energy efficiency. The OECD countries, on average, use 160 kilograms of oil-equivalent energy for every $1,000 of GDP (measured at purchasing power parity). But, in energy-efficient Switzerland, energy use is just 100 kg per $1,000 of GDP, and in Demark it is just 110 kg, compared with 190 kg in the US.
In an age of intense technological competition, countries that combine public and private research and development (R&D) financing are outpacing the rest. The US continues to excel, with huge recent breakthroughs in Mars exploration and genomics, though it is now imperiling that excellence through budget cuts. Meanwhile, Sweden and South Korea are now excelling economically on the basis of R&D spending of around 3.5% of GDP, while Israels R&D outlays stand at a remarkable 4.7% of GDP.
In an age of rising inequality, at least some countries have narrowed their wealth and income gaps. Brazil is the recent pacesetter, markedly expanding public education and systematically attacking remaining pockets of poverty through targeted transfer programs. As a result, income inequality in Brazil is declining.