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date: 20 January 2021

Development Economics: From Classical to Critical Analysislocked

  • Susan EngelSusan EngelSchool of Humanities and Social Inquiry, University of Wollongong

Summary

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. Later, however, some scholars focused on how to improve the welfare of the population and the planet informing the critical tradition. The post-war economic development models were fundamentally classical, but they did allow for some state intervention to achieve development, demonstrating the influence of economist John Maynard Keynes. Postwar leftist development economics coalesced around structuralism and dependency theory, or world systems theory, the latter two having their roots in Marxist political economy. This influenced state-led development approaches most associated with the Asian Tigers. In the 1980s, neoliberal ideas came to dominate development economics, however the high social costs of this approach led to a greater focus on poverty, while more progressive scholars emphasized capabilities and redistribution with growth. Since the Global Financial Crisis, questioning of neoclassical economics has grown and, while it is still far from dead, more heterodox approaches are flourishing.

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