The Origins of Development Economics: How Schools of Economic Thought Have Addressed Development?

Abstract

DOI: 10.1355/ae23-2j The Origins of Development Economics: How Schools of Economic Thought Have Addressed Development? Edited by Jomo K.S. and Erik S. Reinert. London and New York: Zed Books, 2005. Pp. 165. The content of The Origin of Development Economics reflects the exacting labours of its editors, Jomo K.S. and Erik S. Reinert. The volume captures the long tradition of development economics and tries to link the early economics traditions with classical development economics from the 1940s onwards. It is shown that pre-Smithian economics has much in common with classical development economics. The book, thus, reviews the history of economic thought to highlight the developmental concerns in earlier economic discussions. It also talks about the second half of the twentieth century, when abstract and formal approaches displaced historically informed and institutionally nuanced discourses. The volume uses a good mix of theoretical and empirical analysis. The book should prove to be useful to both academics and policy-makers in opening up new ways of looking at economic development. The book contains eight different essays. The organizational principle of the volume is mainly chronological and flows from general to the practical. In the first three chapters of the book, Erik and Sophus Reinert offer fascinating surveys of mercantilism, the Italian tradition associated with its city-states, and the later German economic tradition. In mercantilism, it is argued that development economics originated during the Renaissance and the poor nations of Europe copied the economic structure of rich nations to force the inhabitants into activities that yielded a better standard of living. The Italian tradition focused on the developments of the 1600s and 1700s and favoured the role of the state in leading and co-ordinating economic transition and progress. It has been argued that England's penetration of world markets in the sixteenth and seventeenth centuries occurred only with the help of royal charters as it gave certain privileges to specific sectors of the economy. As for the German economics tradition, it has always stressed on development economics in the sense that it focuses on technology and new knowledge, production, policies based on morality and on the context. Its approach always produced a theory where economic growth is both activity-specific and uneven. In the next chapter, Mushtaq Khan surveys the historical debate over capitalist transformation. He argues that as a precondition for efficient markets, development theories need a structure of stable property rights. Yet, property rights often fail to account for larger social transformation, which is necessary for further economic development. Hence, today, economists not only need to identify the institutions and interventions, but also need to understand the structure from which they arise. …