By Svenja Flechtner, Jakob Hafele & Theresa Neef
Much has been said about what’s going wrong in development economics – on this blog (for example by Adel Daoud, Ingrid H. Kvangraven, or Jacob Assa) and elsewhere (for example by Angus Deaton, Dani Rodrik, and Benjamin Selwyn), as well as in newspapers. Much has been written, too, about alternative perspectives and approaches to economic development thinking (this recent compilation by Reinert, Ghosh and Kattel gives an overview of many of them). But is it possible to build a coherent pluralist and critical framework out of these approaches? If so, what could a critical and pluralist research agenda for development economics look like?Read More »
“Our role is to widen the field of discussion, not to set limits in accord with the prevailing authority.” Edward Said, Orientalism (1978)
This blog post aims to introduce Patnaik’s theory of imperialism – as developed in The Value of Money (2009) – and its relation to economic theory. According to Patnaik a cogent economic theory that seeks to understand the laws of capitalism necessarily stems from a coherent theory of money due to the central place money plays in a capitalist mode of production. Hence, the purpose of his scientific endeavor is to examine the underlying social arrangement behind the determination of the value of money. Consequently, the conceptual framework Patnaik establishes starts with the following question: what does determine the value of money?
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Is it time for dependency theory to make a comeback? Its central idea is that developed (”core”) countries benefit from the global system at the expense of developing (”periphery”) countries—which face structural barriers that make it difficult, if not impossible, for them to develop in the same way that the already developed countries did. As neo-classical economics came to dominate the field in the 1980s, the theory lost prominence and traction. Given the vast imbalances that persist within and among nations in the global economy today, it’s an opportune time to revisit the framework.
To that end, INET’s Young Scholars Initiative (YSI) has released a new e-book, Conversations on Dependency Theory. The volume, released by YSI’s Economic Development Working Group, comprises interviews with 13 scholars from around the world who express a variety of viewpoints on the meaning and relevance of dependency theory in today’s context.
This month, four prominent Marxists met at The New School in New York to debate the relevance of imperialism. The debate was related to the publication of Prabhat Patnaik’s (Jawaharlal Nehru University) new book A Theory of Imperialism (written with Utsa Patnaik). With him in the panel were geographer David Harvey (CUNY), political scientist Nancy Fraser (The New School), and economist Duncan Foley (The New School). Economics Professor Sanjay Reddy (The New School) moderated the debate. The main question for the panelists was: Is ‘Imperialism’ a relevant concept today? A fruitful debate followed, suggesting that contemporary imperialism is crying out for analysis and critique.
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As people across the world are struggling to understand the rise of Trumpism, anti-establishment and anti-free trade movements, Erik Reinert (Tallinn University of Technology), Jayati Ghosh (Jawaharlal Nehru University) and Rainer Kattel (Tallinn University of Technology) have put together an impressive Handbook of Alternative Theories of Economic Development that can help make sense of what’s going on. As the field of Economics has become increasingly narrow since the 1970s, many important scholars and theories have been excluded from the field, and since forgotten. This Handbook presents rich historical accounts and ideas that can help explain economic and social development, and is a much needed attempt to correct for the existing biases in the field of Economics.Read More »
This blog post provides insights from what I have come to call the legal political economy perspective to critique the World Bank and neoclassical economics more generally. At the heart of what has been called the World Bank’s Third Moment in Law and Development is the claim that government involvement is necessary to eliminate “market failures” and promote both business development and social justice.
In contrast to the mainstream Law and Economics (L & E) approach, which informs the Third Moment, my position, derived from the Critical Legal Studies (CLS) tradition (and its historical ancestor, Legal Realism), is:
- Property is fundamentally a bundle of rights and thus property ownership at its core entails coercive power struggles between rivals and between owners and non-owners; coercion at its core.
- The interrelatedness of law and power relations (“If the program of Realists was to lift the veil of legal Form to reveal living essences of power and need, the program of the Critics is to lift the veil of power and need to expose the legal elements in their composition” (Gordon 1984, 109)). These power struggles over economic outcomes occur within the context of background laws that determine property, contracts, and torts.
- The notion of an economic seesaw in Hale’s framework with potential for instability in property and contractual relations.
- If the goal is to understand how legal structures shape power struggles then the question becomes how are the laws themselves to be determined? Following the CLS perspective, I would emphasize the role of ideational factors determining the intellectual underpinnings of neoliberal policies—factors that have consciously been created by the financiers of the L & E tradition.
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Where do critical development economists publish their articles and blog posts? Where can you read critical research on development economics? What kind of textbooks do critical development economists teach from? Here is a preliminary list of journals, blogs, and textbooks (but please send any additions you might have!).
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During the 1990s, although the market paradigm was dominant in economics and public policy, a new literature stressing the importance of the role of the state in industrialization rose to fame. We can mention Alice Amsden’s Asia Next Giant (1989), Robert Wade’s Governing the Market (1990) or Peter Evans’ Embedded Autonomy (1995). This literature dwelled on the East Asian miraculous industrialization and showed with empirical and historical evidence how the state apparatus was necessary to spark the economic take off. More recently, these academic attempts multiplied (for instance in the developmental state literature with Ha-Joon Chang’s Kicking away the Ladder, 2002) and gained new interest after the 2008 financial crisis. Yet, this literature is not novel and draws its inspiration from previous economists and social scientists, who for a long time warned us of the danger of disintegrating the state from the economic sphere. On the other hand, mainstream theorists tend to undermine, if not ignore, state intervention and consider it as an exogenous variable to economic growth (see for example Bela Balassa, Lord P. T. Bauer, Anne Krueger and Deepak Lal). The post-1980s era had provoked academic debates around the role of the market versus the role of the state for developing countries: the claim made by mainstream economists and politicians was that countries which pursued a state-led industrial policy failed greatly and that the Latin-American debt crises was an illustration of this (see for example the 1983 World Development Report). On the contrary, it was observed that the East Asian newly industrialized countries (the so-called ‘four tigers’) ‘miraculously’ developed by pursuing market-oriented policies (see for example the World Bank). As heterodox economists, such as Amsden, Wade, and Evans, retaliated by stating the exact opposite, the extent to which the state could be an industrial actor or not become a new agora for both camps.
However, what if the terms of the debate were problematic at the conceptual level from the beginning? Is the dichotomy “state vs. market” as evident as it appears to be in policy debates? A theoretical detour going back to Karl Polanyi might help us shed some light on this issue.
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