1963-2018 - 55 years of Research for Social Change

  • 0
  • 0

Back | Programme Area: Special Events (2000 - 2009)

A Brief Note on the Decline and Rise of Development Economics (Draft)

Economics as a discipline has always been concerned with development. The early economists, from the Physiocrats through Smith and Ricardo to Marx, were essentially concerned with understanding the processes of economic growth and structural change: how and why they occurred, what forms they took, what prevented or constrained them, and to what extent they actually led to greater material prosperity and more general human progress. And it was this broader set of "macro" questions which in turn defined both their focus and their approach to more specific issues relating to the functioning of capitalist economies. It is true that the marginalist revolution of the late 19th century led economists away from these larger evolutionary questions towards particularist investigations into the current, sans history. Nevertheless it might be fair to say that trying to understand the processes of growth and development have remained the basic motivating forces for the study of economics. To that extent, it would be misleading to treat it even as a branch of the subject, since the questions raised touch at the core of the discipline itself.

But of course, what is now generally thought of as development economics has a much more recent lineage, and is typically traced to the second half of the twentieth century, indeed, to the immediate postwar period of the 1950s and 1960s when there was a flowering of economic literature relating to both development and underdevelopment. While some of this became the basis for subsequent "structuralist" analysis, much of the standard literature of that time was still very much within the mainstream of the discipline, and retained the fundamentals of the mainstream approach even while altering some of the assumptions. Thus, the economic dualism depicted by Arthur Lewis, the co-ordination failures inherent in less developed economies described by Rosenstein-Rodan, the efficacy of unbalanced "big push" strategies for industrialisation advocated by Albert Hirschman, all in a sense dealt with development policy as a response to the market failures which were specific to latecomers.

The logical conclusion of such exercises was in the emergence of the development planning literature, which predates these works because of the association of the early writers on planning with the actual planning process in the Soviet Union in the 1920s and 1930s. This naturally became more developed and more sophisticated with time, especially once the "mixed economy" planning strategies began to be worked out from the 1950s. But this literature needs to be distinguished from the more well known standard development economics literature, which was much more crucially dependent upon the assumptions of capitalist economic working.

However, as is now well known, all this discussion somehow receded into the background especially during the 1980s. Indeed, development economics, even of the mainstream variety, on the whole suffered a fate similar to Keynesian economics in developed countries, of being first reviled, then ignored, and finally forgotten. A decade ago it was not uncommon to come across occasionally gleeful obituaries of development economics, which emphasised the perception which had become increasingly widespread within the mainstream economics profession : that all answers to basic economic queries for all types of countries - developed, developing and underdeveloped - could come from the same neoclassical analytical framework which privileged the market mechanism.

You can retrieve the full paper by clicking on "Options for this Publication", on the right.