Tensions in Hegemonic Stability and Global Structural Transformation

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In this article I argue that there is a fundamental tension characterizing the process of global development and structural change. Industrial policy is necessary for triggering structural change in the developing world. Yet such efforts put pressure on economic leaders to adjust structurally as well. Drawing from international relations theory, a hegemon is necessary to provide international public goods such as peace, which are critical for development to be possible in the first place. But this necessity gives the hegemon expansive powers over international institutions of economic governance; and this enables the hegemon to externalize the costs of adjustment associated with structural change in the developing world.Read More »

To be Poor in Times of the Current Financial Architecture

Late developers are nowadays confronted with the problem of having to earn foreign currency to finance structural transformation under extremely unfavourable conditions. The dependency on forex is rooted in the international financial architecture and represents a major pitfall for countries trying to catch up. However, this structural impediment to transformation is not paid much attention to by the dominant development economics.Read More »

Despite many changes in today’s modern global economy developmental states are needed more than ever

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In the fall of 2017, SPERI’s Matthew Bishop and Anthony Payne gathered essays from a group of nine development economists who produced essays on ‘Revisiting the developmental state’ (SPERI Paper No. 43). They drew upon a body of work published on the SPERI Comment blog and in other publications about the state’s appropriate role in development and the nature of a modern industrial strategy. The essays examined the current status of the notion of a ‘developmental state’ in today’s contemporary context of globalization. This article reviews the series, highlights some key takeaways, and considers some other elements that were not addressed by the essays.Read More »

Economic Development in the 21st Century: A Review

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by Ramiro Eugenio Álvarez (University of Siena) and Santiago José Gahn (Roma Tre University)

What drives economic development? What is the nature of the external constraints that developing economies face? What is the role of industrial policy and the central banks in the development process? These were the core questions that were posed in the recent webinar series on Development in the 21st Century, organized by the Economic Development working group of the Young Scholars Initiative (YSI). These four meetings were particularly oriented towards examining notions such as distribution, patterns of specialization, industrial policies and balance of payment constraints. The discussion of such phenomena is especially important in a context of deep academic divides regarding the drivers of economic development.

Following the tradition of the Latin American structuralist school, the meetings placed special emphasis on the inherent challenges of conditions associated with being in the periphery when the problem of development is faced. During the meetings, processes of economic integration that perpetuate asymmetric economic relations of the center-periphery type were examined, as well as the role played by public institutions, e.g. central banks, in the development of industrial economies.Read More »

Historicising the Aid Debate: South Korea as a Successful Aid Recipient

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‘The principal enemy is orthodoxy: to use the same recipe, administer the same therapy, to resolve the most various types of problems; never to admit complexity and try to reduce it as much as possible, while ignoring that things are always more complicated in reality.
Albert O. Hirschman (1998:110)

It’s clear from last week’s blog posts by Duncan Green that he is tired of academic critique against aid which have not been translated into concrete solutions (see here and here). However, the problem with his ‘marmite’ approach to addressing very complex problems is that it leads to reductive debates which are more symptomatic of the problem than constructive ways of finding solutions. Following Pablo Yanguas’ synthesis of research approaches I thought of taking a step back and analyzing the case of a successful aid recipient, South Korea.  I do this in hope of moving away from the ‘literature’ – which Duncan finds overbearing – as well as getting away from the linearity of the contemporary monitoring and evaluation approach used by the aid sector. Read More »

Africa: Time to Rediscover the Economics of Population Density and Development

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By Erik Reinert and Richard Itaman.

At the OECD’s origin, we find the 1947 Marshall Plan that re-industrialised a war-torn Europe. At the very core of the Marshall Plan was a profound understanding of the relationship between a nation’s economic structure and its carrying capacity in terms of population density. We argue that it is necessary to rediscover this theoretical understanding now, in the mutual interest of Africa and Europe.Read More »

What is missing in the ‘33 Theses for an Economics Reformation’

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Andrew Simms (New Weather Institute), Sally Svenlen (RE student), Larry Elliott (Guardian), Steve Keen (Debunking Economics) and Kate Raworth (Doughnut Economics) symbolically nail the “33 Theses” to the door of the London School of Economics in December 2017. rethinkeconomics.org.

By Erik Reinert (Talinn University of Technology) and Andrea Saltelli (Universitat Oberta de Catalunya)

On the occasion of the 500th anniversary of Martin Luther’s Reformation, 33 Theses for an Economics Reformation were formulated by Rethinking Economics and the New Weather Institute. The document was symbolically nailed to the door of the London School of Economics In December 2017 and endorsed in The Guardian, and was supported by an impressive list of over 60 leading academics and policy experts. The initiative offers a rare and most welcome refreshing message from the House of Economics.

Several elements in the theses are long overdue – for example, the existence of planetary limits, the superiority of political deliberation over economic logic, the appreciation of the role of uncertainty in economic predictions, the non-independence of facts and values when economic thoughts are formulated, the warning against over-reliance on modelling, econometrics and formal methods. Also important is the indication that both growth and innovation need to be conceived with a desirable end in sight, one which can be associated with material and spiritual progress – rather than with misery, inequity and inequality. It is finally all important that in the teaching of economics itself the history and philosophy of economics should be taught, together with all economic theories: not just the family tree of mainstream economics.Read More »