Reflections On Economic Development

Abstract

Editor’s Introduction Originally published in Volume 10, Number 1, Spring 1966, pages 5-13. Three years after the merger that created Omicron Delta Epsilon, Evsey Domar (1914-1997) became one of the first established “big names” to publish a paper in The American Economist. The occasion was precipitated by the inaugural delivery of the John R. Commons Lecture at the annual American Economic Association conference the previous December. ODE presents the Commons Award biennially to an outstanding economist in recognition of academic achievements and for service to the economics profession. The award memorializes Professor Commons who founded one of ODE’s predecessor honor societies in 1915 at the University of Wisconsin. Professor Domar, immortalized as one of the originators of the Harrod-Domar model of economic growth, was the first in a long and continuing line of prominent economists to receive the Commons Award, including Milton Friedman, Kenneth Arrow, Douglas North, Gary Becker, and Peter Diamond. In this paper, Professor Domar outlines his thoughts and ideas on why and how underdeveloped countries should institute market-oriented reforms to promote economic growth and prosperity. Fifty years later his words still ring true, “Economic development is a difficult and complex process, hard to deal with, because contrary to some of our favorite models, it is essentially not a capital but a human problem.”