Comments on Peter Drysdale “Politics and Chinese integration into the global economy”, 4/04/2010, http://www.eastasiaforum.org/2010/04/04/politics-and-chinese-integration-into-the-global-economy/
The mainstream economics has been established on the premise of market efficiency in resources allocation, although even with that main stream, macroeconomics indicates that sometimes market can be seriously inefficient in the sense that large unemployment can occur from time to time and some non-market or super-market mechanisms, that is, government interventions have to be resorted.
Also, assets markets have shown to have tendance of extremely inefficient from time to time.
Further, there are different economies in the world that are vastly different in productivity, income levels and etc. The experiences of developing economies with different systems and growth have shown that the mainstream economics have serious limitations in terms of its applications to the non world-frontier economies.
It seems that there are multi dimensions in economics and efficiency. There may be cases where it is apparently and obviously inefficient by the norm of the mainstream economics yet the outcomes can be much more efficient than some cases where economics would say it is efficient.
Efficiency may work at higher dimensions than the current mainstream economics can comfortably handle. The current economics may be a special case or a branch in a higher dimension economics.
Maybe in economics of a higher dimension (that is yet to be developed), public institutions like government as opposed to pure market can improve the efficiency of a pure market approach. Alternatively, new institutions of a different nature from the current ones will be required to govern efficiency.