Development economics and the compensation principle (original) (raw)

Development Economists Need to be Interdisciplinary in their Thinking

Social Change, 2017

This scholarly and insightful paper makes a very important intellectual intervention in today's context of macroeconomic policies informed by the neoliberal logic of development that political leaders and mainstream economists of nation states all over the globe are imposing. The author, Professor M.A. Oommen, a veteran development economist, rightly avers that economic theories have to be grounded on social reality. His attention is on the ends and means of economics. The author provides a detailed account of the theoretical unfolding of growth theories starting from Adam Smith's 'invisible hand' to neoliberal thinking marked by an 'invisible heart'. He minces no words against economic thinking that valourises the philosophy of 'might is right' and 'market fundamentalism'. He has made a strong case in favour of the human development approach and right-based perspective and draws inspiration from theories of social justice, distributive justice and gender justice. The author has provided insights into the capabilities approach put forward by Amartya Sen and Martha Nussbaum that advocates that capabilities supply guidance superior to that of utility and resources and ensures universal human rights. Thus right to food, shelter, education, freedom, justice and bodily integrity get integrated into the human development growth models. He also avers that this approach brings economics closer to ethics and justice. The author criticises Lionel Robbins for dividing countries into 'developed' and 'developing' as this type of classification is ahistoric and asocial and camouflages the colonial exploitation of the global south by the global north for over 200 years in Africa and Latin America. Economic benefits derived by institutionalisation of slavery in the African continent for over five centuries that provided primitive accumulation of capital by the so-called 'developed countries' never get mentioned in economics textbooks. Not only this, contributions of subsistence economies in ensuring livelihoods and unpaid care economy are not only never recognised Social Change 47(3) 442-446

Economics of Development and the Development of economics

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Development Economics: From Classical to Critical Analysis

Oxford Research Encyclopedia of International Studies

The definition of “development” has changed over the years since the inception of development economics as a sub-discipline of economics in the 1950s. Initially, development economics was understood as a study of how the economies of nation-states have grown and expanded, placing the discipline in line with the classical and neoclassical traditions of economics. However, there emerged another definition, this time with a focus on how to improve the welfare of the population and the planet—although much development economics in this Marxist and neo-Marxist vein ultimately also focused on national income. The early economic models were fundamentally classical ones, emphasizing structural change, but they did allow for some state intervention to achieve development, showing the influences borrowed from John Maynard Keynes. Meanwhile, the best-known leftist traditions of development economics are structuralism and dependency theory, or the world systems theory, and the latter two have t...

Changing Perspectives in Development Economics: A Critical Appraisal

Development Economics as a discipline has emerged to deal with the economic development in less developed countries. The post-colonial nations after the World War II made an attempt to build capitalist development with strategies of rapid industrialization. Several models of development were developed identifying certain key processes that can help acceleration of industrialization, with the help of an interventionist state. The experience of achieving development based on these models had mixed results. However, with decline of Keynesian economic and rise of neoliberalism in the developed countries led to an ideological attack on the development economics and its core assumptions. Yet, they could not dislodge some of the fundamental concerns of poor countries such as poverty alleviation from the discourse. This paper makes a critical review of these developments, which helps one to understand the changing perspectives in the literature.

Rethinking development economics

Choice Reviews Online

Twelve years ago, when I was chief economist of the World Bank, I suggested that the major challenge to development economics was learning the lessons of the previous several decades: a small group of countries, mostly in Asia, but a few in other regions, had had phenomenal success, beyond anything that had been anticipated by economists; while many other countries had experienced slow growth, or even worse, stagnation and decline-inconsistent with the standard models in economics which predicted convergence. The successful countries had followed policies that were markedly different from those of the Washington Consensus, though they shared some elements in common; those policies had not brought high growth, stability, or poverty reduction. Shortly after I left the World Bank, the crisis in Argentina-which had been held up as the poster child of the country that had followed Washington Consensus policies-reinforced the doubts about that strategy. The global financial crisis, too, has cast doubt over the neoclassical paradigm in advanced industrial countries, and rightly so. Much of development economics had been viewed as asking how developing countries could successfully transition toward the kinds of market-oriented policy frameworks that came to be called "American style capitalism." The debate was not about the goal, but the path to that goal, with some advocating "shock therapy," while others focused on pacing and sequencing-a more gradualist tack. The global financial crisis has now raised questions about that model even for developed countries. In this short essay, I want to argue that the long-term experiences in growth and stability of both developed and less developed countries, as well as the deeper theoretical understanding of the strengths and limitations of market economies, provide support for a "new structural" approach to development-an approach

The Decimation and Displacement of Development Economics

Development and Change, 2015

This paper offers a reading of contemporary mainstream development economics as an overdetermined product of transformations internal to the discipline of economics (i.e., the late neoclassical turn within contemporary mainstream economic theory), transformations within the institutional-discursive matrix of development (i.e., the transition from growth-centered policies to poverty-alleviation and good-governance oriented policies), and a broader transition from post- war Keynesian developmentalism (with its variants in the second and third worlds) to actually existing varieties of neoliberal governmentality. Within this constellation, we claim that, while mainstream development economics has been gradually decimated into micro-level impact appraisal studies of developmental projects (the so-called ‘randomization approach’), the broader macro-economic questions are displaced from the field to the purview of methodologically individualist, late neoclassical analyses of institutions and growth (the so-called ‘new institutionalism’).