It is the nature of governance that determines whether people deploy their talents and energy in pursuit of innovation, production and job creation, or in rent-seeking and lobbying for political protection. The contrast is starkest in emerging countries, but differences also exist among the advanced economies.
What makes people creative and innovative is still being debated. Clearly our schools and the educational curriculum must change. But what too, about the communities where young people spend more than half their lives and where their families, friends and fellow citizens live and work. Communities, indeed whole cities, need to reinvent themselves.
The world has kept close watch on the ongoing downward adjustment of China's shadow banking system -- credit intermediation involving entities and activities outside the regular banking system -- with the near-default of a large trust product during the last few weeks being part of the worrisome news coming from the country.