Can You Believe it? David Dollar Tapped to Instruct China

By BOB DAVIS

WASHINGTON — The U.S. Treasury chose World Bank economist David Dollar as economic emissary to China despite sharp criticism of his economic research.

Mr. Dollar co-authored several influential studies that argued for the effectiveness of aid and the importance of tariff cuts in liberalizing economies and reducing poverty.

But in 2006, a detailed review of World Bank research led by Princeton economist Angus Deaton called the aid paper “unconvincing” because of methodological problems. The paper’s results “provide only the weakest of evidence for their central contention, that aid is effective when policies are sound,” the review said. The reviewers said the work on trade and growth raised “serious questions about whether the review is really supported by the evidence.”

The Bank defended Mr. Dollar’s work on trade and said that Mr. Dollar’s work “stimulated a useful and ongoing debate.”

Mr. Dollar is now the World Bank’s country director for China. He will remain in Beijing for his Treasury job. Mr. Dollar didn’t respond for comment.

Treasury Secretary Timothy Geithner called Mr. Dollar and David Loevinger, who was appointed as the Washington-based senior coordinator for China affairs, “uniquely qualified to serve in these roles because of their deep expertise and extended experience” in U.S.-China economic issues.

“David Dollar has been involved in some of the most important debates in economic policy for developing countries and the debates have been lively and important. And those at the center of this debate and whose views are taken seriously should expect to be criticized,” a senior Treasury official said.

Write to Bob Davis at bob.davis@wsj.com

http://online.wsj.com/article/SB124389754251074257.html#mod=testMod

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