For a year or so following the financial crisis, the recovery strategy in most countries was based on a renewed belief in activist government—stimulus packages, bailout of key industrial and financial firms and even talk of (and some action on) industrial policy, notably related to "green growth".

Since then, however, a different kind of recovery strategy has been on the ascendancy. This strategy believes that recovery requires a dramatic cut in government spending, minimal tax increases (ideally tax cuts for the rich) and...