What is development economics? The answer will undoubtedly vary widely depending on whom you ask. I’ve said that this blog aims to take a critical approach to development economics, but what does that mean?
What I Think Development Economics Is About
The term development is clearly contentious (see Escobar or Lal, for example), as it suggests some form of linear progress, and dates back to colonial times when the colonizers sought to ‘develop’ the colonized. No matter how much you might dislike it, it has become the term for classifying the study of low- and medium-income (developing) countries. In my view, there are at least three important elements that must be included in any understanding of development economics.
1. The Economy
First of all, I agree with Ha-Joon Chang’s definition of Economics as the study of the economy, rather than the application of a specific set of methods. Development economics must therefore be the study of the economies of developing countries. This is more in line with the development economics thinkers of the 40s and 50s (what Kurgman calls ‘high development’), such as Rosenstein-Rodan, Ragnar Nurkse, and Arthur Lewis. Common among these scholars is the idea that there is something particular about developing countries that makes their economies function differently from economies of advanced countries. An understanding that different economies may behave differently opens the door for studies of history, politics, institutions, and the structure of the economies. Understanding the specific constraints faced by developing economies is also important for critically assessing development programs, such as the much-hyped micro-finance interventions (see my recent piece with Paulo dos Santos).
2. The Global System
Secondly, a global perspective is crucial for the study of development economics, as developing countries are integrated into the global economy and are heavily affected by global systems of trade, investment, international capital flows, as well as geopolitics. The policy space of developing countries in the face of global trade agreements and conditionalities of international financial institutions is crucial for some developing countries, although less crucial for others (e.g. the BRICS). Nonetheless, suggesting that developing countries do not benefit from the global system in which they are integrated, is in today’s political climate often dismissed as conspiracy theory (as explained by Jonathan Glennie and Nora Hassanaien). However, studying developing countries without considering the global political economy of development can lead to misleading conclusions about feasible development strategies.
Finally, recognition of the economic system in which we find ourselves – globalized capitalism – is important for our understanding of developing countries’ economies. What this entails, exactly, should be a subject for debate within the discipline (however it is mostly debated by non-economists, such as Brenner, Cardoso, and Corbridge)
What Development Economics Is To The Mainstream
Now, how is development economics understood by mainstream economists? As with any hegemonic order (in Gramsci’s understanding), the mainstream does not have to define or defend itself. But we can find out what Development Economics means to the mainstream by looking at the top journals, top publications, and the Development Economics syllabi of top schools.
A Google scholar search tells us that the Journal of Development Economics is the most influential journal within the field of Development Economics (excluding interdisciplinary journals). The Journal of Development Economics describes itself as a journal that:
[…] publishes original research papers relating to all aspects of economic development – from immediate policy concerns to structural problems of underdevelopment. The emphasis is on quantitative or analytical work, which is novel and relevant.
While its focus on ‘all aspects of economic development’ sounds incredibly broad, their emphasis ‘on quantitative or analytical work’ does narrow down the ways of approaching development. Here we see that the discipline somewhat constricts itself to what’s possible to quantify and model. A quick look at the journal’s most cited articles confirms a strong bias towards econometric methods and little emphasis on historical and political contextualization of economic problems. Of course, there is nothing wrong with quantification and modeling per se, as long as one is aware of the assumptions one is making, and as long as the assumptions aren’t so unrealistic that the findings don’t give much meaning (see this INET blog for some examples of unrealistic assumptions found in textbook Economics).
Next I took a look at the Development Economics class at Harvard (by Michael Kremer), for an idea of how development economics is understood there. The syllabus opens by stating:
This will be a technical class and non-Ph.D. students are not permitted to enroll. Ph.D. students are required to have taken or be concurrently taking PhD level microeconomics and econometrics.
This gives us some further clues to how the establishment views the field. First of all, it is a highly technical class. Secondly, it is closely tied to microeconomics, despite the fact that the opening line of the course description reads ‘This course will cover macro-economic topics including ….’.
This is in line with my own graduate experience from the LSE, where the Development Economics class I took was heavily focused on the interpretation of econometric results of economics papers dealing with developing countries’ economies. The opening line of the description of the macroeconomic part of the course reads:
This course explores the foundations of applied macroeconomic policy analysis by combining a rigorous introduction to advanced quantitative methods with applications to the theory and empirics of long-run growth in developing countries.
Indeed, both Harvard and the LSE place heavy emphasis on quantitative methodologies in their development economics courses. This is in line with development economics’ turn towards empirical micro-approaches, which has been criticized both from within and outside the field (for example by Romer, Rodrik, Cartwright and Reddy). Moreover, the technical approach to Economics is not specific to Development Economics, but a characteristic of the field as a whole. As the French Economist Rémy Herrera puts it, Neoclassical Economics started absorbing Development Economics in the 1970s and has since then become a sub-field of Neoclassical Economics. In other words, the field development economics has narrowed substantially since the 70s.
Towards A More Comprehensive Approach To Development Economics
Going back to the three elements I defined as essential to development economics, I can see that proponents of the current paradigm would probably argue that their approach to development economics does indeed involve all those three aspects. The particularities of development economies (1) are dealt with by ‘imperfections’ (as most famously championed by Stiglitz), the global political economy (2) is dealt with through regression analyses of trade and capital flows, and capitalism (3) is (sometimes) acknowledged, but considered to be a stable, perfect system.
However, such a technical, apolitical and ahistorical approach to Development Economics misses the inherently political and historical nature of social and economic phenomena (as I also suggested last month in my post about Romer’s approach to development). This blog takes on the task of challenging the technical treatments of these three elements – specific characteristics of an economy, the global political economy, and capitalism – and aims to take a broader approach to development economics than what is currently possible within mainstream Economics departments and journals.
Thoughts about what ‘development economics’ means or should mean? Leave a comment or send in a reply.