Development+Which+Way+Now?

Summary by Caroline Chumo, for CRS, November 29, 2010 Main point: Contrary to some (neoclassical economic) beliefs, development economics is not useless; it just needs a fresh approach that considers social gains, income distribution and political influence over economic gains. Sen reviews the development economics literature and comes up with ___ main themes: “industrialization, rapid capital accumulation, mobilization of underemployed manpower, and planning and an economically active state” (746). Development economists did not think neoclassical economics fit the developing world well because developing countries needed strong state involvement in economic policy. The recent positive attention on neoclassical economics and markets and trade may have something to do with the apparent demise of development economics. He goes through each of the 4 main themes in light of the current economic status in low and middle income countries and finds that each theme is still very relevant to understanding why developing countries can be successfully in increasing GNP per capita. Having justified the continued study of development economics, Sen then critiques it: · The subfield should put more emphasis on the lack of social gains from economic development. Growth is fine, but only insofar as it makes life better (e.g. health). · Development economics (DE) should consider how regular people are “entitled” to accessing goods. In other words, the good must be distributed evenly. · DE must also understand the “political complexities” associated with income distribution and social gains from growth. E.g. distribution of relief during a famine will depend on the social and political forces controlling the food and distribution services.
 * Amartya Sen, “Development: Which Way Now?” //Economic Journal// 93 (December 1983), pp. 745-62.**