Models and Misperceptions: Chenery, Hirschman and Tinbergen on Development Planning

Abstract

Abstract In the 1950s, when development as a subject for study was as yet poorly defined, misunderstandings were not uncommon. The grounds were often methodological, but substantive analytical differences were also involved. I focus on an unusual context, the invitation given to one economist, Hollis B. Chenery, who promoted the neo-classical approach to growth, to review two works stemming from very different perspectives. One of these was The Design of Development by econometrician Jan Tinbergen; the other was The Strategy of Economic Development by the highly original thinker Albert O. Hirschman. Chenery found himself baffled by Hirschman’s stress on the capacity to make quick and strong decisions in favor of development, if backwardness was to be overcome. But he was equally drawn to Tinbergen’s advocacy of detailed development plans. I argue that Chenery was wrong on both counts. He failed to understand Hirschman’s argument, which admittedly was novel, and misperceived Tinbergen’s approach as of a piece with his own convictions. The episode is instructive chiefly in opening up to reconsideration the ideas and misperceptions of three pioneers of development economics.