Development economics

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Development economics or development economics refers to that part of economics that deals with the differences in development of individual economies. The main focus is on developing countries , economic reasons for their underdevelopment ( development theory ) and recommendations for development policy .

The current definition of development is advancing i. d. Usually depends on pure economic indicators (such as national income , growth , distribution ) and also takes into account socio-economic factors such as the illiteracy rate , child mortality and level of education.

With regard to the causes of economic underdevelopment, a distinction is made between endogenous (within the country itself) and exogenous (externally determined) reasons.

Development economics encompasses both a macroeconomic and a microeconomic view. While the macroeconomic view deals with long-term economic growth and structural changes in the growth process, the microeconomic view deals with incentive problems at the level of individual households and companies.

Development economics also deals with institutional issues such as the functions of the World Bank and the IMF (International Monetary Fund). One specific issue are failed states ( failed states ), the reasons for its failure and approaches to overcome this situation.

precursor

The mercantilism of the 17th century can be seen as the earliest forerunner of development economics, which linked growth and national prosperity with an increase in the foreign trade surplus, which should be promoted by protectionism . However, here the colonies were only viewed as sources of raw materials and sales markets for the motherland's finished goods. Alexander Hamilton was the first to criticize protectionism as an obstacle to the development of any industrialization. As a result, mainstream economists saw free trade as the guarantor of development. Colin Clark , who suggested using national income as an indicator and basis for international comparisons, can be seen as the forerunner of development economics in the narrower sense . He developed the concept of economic growth as measured by the growth rate of national income. The problem of the development of poorly developed countries and regions only came into the focus of the economy after 1945.

Important representatives

Important representatives, sorted according to the year of publication of their most important contribution to development economics, are:

• Paul Rosenstein-Rodan (1902–1985): His study Problems of the Industrialization of Eastern and South-Eastern Europe from 1943 was, according to the development economist Hans-Heinrich Bass, “probably the first work of the subdiscipline of development economics at all”. Rosenstein-Rodan argued that the uncoordinated private sectors were overwhelmed by the task of stimulating growth. The necessary complementarity of the development of industries and the possibility of economies of scale. A development strategy requires a state -induced , large-scale industrialization ( big push in Rosenstein-Rodan's diction of 1957), combined with long-term state planning. Therefore Rosenstein-Rodan was also a representative of the development economic strategy of balanced growth ( Balanced Growth ).
• Raúl Prebisch (1901–1986): The work The Economic Development of Latin America and its Principal Problems published by the Argentine Prebisch in 1949 (Spanish) and 1950 (English) (as well as Hans Singer's work Postwar Price Relation Between for the UN) Underdeveloped and Industrialized Countries , 1949) argued that world trade would lead to a secular deterioration in the terms of trade in developing countries ( Prebisch-Singer thesis ).
• Ragnar Nurkse (1907–1959): His 1953 paper Problems of Capital Formation in Underdeveloped Countries placed the concept of the vicious circle of poverty as a cause of economic backwardness at the center of the analysis. To overcome structural poverty, Nurkse also argued in favor of the concepts of big push industrialization and balanced growth.
• Sir William Arthur Lewis (1915–1991): The British described in an article published in 1954, Economic Development with Unlimited Supplies of Labor, a model of a dual economy. He referred to the duality of the market in developing countries between a traditional agricultural sector and a modern industrial sector (Lewis model). Lewis received the Alfred Nobel Memorial Prize in Economics .
• Walt Whitman Rostow (1916–2003): The American economist made a contribution to modernization theory with the book The Stages of Economic Growth: A Noncommunist Manifesto from 1960 .

Contemporary representatives of development economics are (in alphabetical order):

• Irma Adelman (1930–2017), professor at the Department of Agricultural and Resource Economics at the University of California, Berkeley , developed the strategy of agricultural-demand (agricultural-demand) in her essay Beyond Export-Led Growth in 1984 led industrialization).
• Daron Acemoğlu , Professor of Applied Economics at the Massachusetts Institute of Technology , points to poor institutional framework conditions as one of the main reasons for the differences in the degree of economic development between different former colonies (see The colonial origins of comparative development ).
• Abhjit Banerjee , Indian economist at the Massachusetts Institute of Technology , recipient of the Alfred Nobel Memorial Prize for Economics 2019 together with his wife Esther Duflo and Michael Kremer .
• Kaushik Basu , Indian economist at Cornell University and editor of the Oxford companion to economics in India , complains, among other things, of the retreat of democracy as a result of globalization.
• Esther Duflo , Abdul Latif Jameel Professor of Development Economics at the Massachusetts Institute of Technology and Co-Director of the Abdul Latif Jameel Poverty Lab (J-PAL) , recipient of the Alfred Nobel Memorial Prize for Economics 2019 together with her husband Abhjit Banerjee and Michael Kremer .
• Chang Ha-joon , South Korean, Reader in the Political Economy of Development at Cambridge University since 2005 , has published various books on development policy, including: Kicking away the ladder. Policies and institutions for economic development in historical perspective (2002), which received the Gunnar Myrdal Prize in 2005 . He argues that, for a limited time, protectionist measures can also be justified to protect the development of an underdeveloped country.
• Robert Kappel (born 1946), former President of the German Institute of Global and Area Studies , Leibniz Institute for Global and Regional Studies (GIGA), dealt with the growth conditions for small and medium-sized enterprises (SMEs) in developing countries.
• Dani Rodrik , Turkish economist and professor at Harvard University is a prominent critic of free trade. In his book “The Globalization Paradox” (2011) he postulates that free trade, democracy and nation statehood are incompatible - one has to decide against one of the three.
• Jeffrey D. Sachs , US economist and special advisor to the Millennium Development Goals since 2002 , is committed to extensive debt relief for extremely poor countries and in the fight against diseases, especially HIV / AIDS in developing countries.
• Amartya Sen (born 1933), Indian economist and economic philosopher, Professor of Economics at Harvard University , Alfred Nobel Memorial Prize for Economics, deals with the problem of poverty and questions of welfare economics . He was instrumental in developing the Human Development Index and related indicators. His work “Poverty and Famines. An Essay on Entitlement and Deprivation ”appeared in 1982. Sen was with the book Economics for people. Ways to justice and solidarity in the market economy , in which he explains the concept of the capability approach (the chances of realization) in a generally understandable way, also known to a wider audience.
• Hernando de Soto (born 1941), Peruvian economist, primarily deals with issues relating to the informal economic sector. His most important work was published in 1986 under the title El otro sendero .
• Paul Collier , Professor of Economics and Director of the Center for African Economics at Oxford University , previously Head of Research at the World Bank, wrote the book: The Bottom Billion. Why the poorest countries fail and what can be done about it (Bundeszentrale für Politische Bildung, Bonn 2008).
• Joseph E. Stiglitz , American economist, Alfred Nobel Memorial Prize for Economics , deals with the problems of globalization in various writings, including: The Shadows of Globalization and The Chances of Globalization and calls for a global social contract.
• Erik Thorbecke (born 1929), developer of the social accounting matrix and the Foster-Greer-Thorbecke indices for measuring regional poverty and regionally unequal income distribution
• Michael Todaro (born 1942), American economist, author of what is probably the most widely used textbook on economic development , researched in particular the causes of migration, which he formulated in a dynamic model ( Harris-Todaro model ).
• Karl Wohlmuth (born 1942), Austrian economist, dealt with the conditions for innovations in the process of catching up economic development.

See also

• Sociology of development
• Adapted technology
• Structuralism (economic theory)
• Neostructuralism (economic theory)

Individual evidence

1. ^ Colin Clark: The Conditions of Economic Progress. London 1940.
2. ^ HW Arndt: Economic Development: A Semantic History. In: Economic Development and Cultural Change, 29 (1981) 3.
3. ^ Hans-Heinrich Bass: Rosenstein-Rodan, Paul N .: The Role of Time in Economic Theory. In: Dietmar Herz, Veronika Weinberger (Ed.): Lexicon of economic works. 650 groundbreaking writings from antiquity to the 20th century. Schäffer-Poeschel Verlag, Stuttgart 2006, ISBN 3-87881-158-6 , p. 435.
4. ↑ Hans-Heinrich Bass: Development Theory. Who is who? - Ragnar Nurkse (1907–1959): Balanced Growth and the Role of Capital Formation in Development. In: Development Policy, Information North-South. 2-3 / 2007, pp. 58-60.
5. ^ Hans-Heinrich Bass: Lewis, William Arthur. The Theory of Economic Growth. In: D. Herz, V. Weinberger (Ed.): Lexicon of economic works. 650 groundbreaking writings from antiquity to the 20th century. Schäffer-Poeschel Verlag, Stuttgart 2006, pp. 281-282.
6. ↑ The global retreat of democracy

literature

• Alain de Janvry, Elisabeth Sadoulet: Development Economics: Theory and practice. routledge, 2015.
• Michael Todaro, Stephen C Smith: Economic Development. The Pearson Series in Economics, 2014 (Testbook).
• Vandana Desai, Robert B. Potter (Eds.): The Companion to Development Studies. 3rd edition, Routledge, 2014.
• Rainer Durth, Heiko Körner, Katharina Michaelowa: New Development Economics . Stuttgart 2002, ISBN 3-8252-2306-X .
• Hendrik Hansen: Politics and Economic Competition in Globalization: Critique of the Paradigm Discussion in International Political Economy. VS Verlag, Wiesbaden 2008, ISBN 978-3-531-15722-1 .
• Hans-Rimbert Hemmer: Economic Problems of the Developing Countries. Vahlen, Munich 2002, ISBN 3-8006-2836-8 .
• Nicolaus von der Goltz, Alexander Brand: The challenge of development. LIT, Münster 2004, ISBN 3-8258-7782-5 .
• Amartya Sen : Economy for Man. dtv, Munich 2002, ISBN 3-423-36264-2 .