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• Background
• The debate on economic development is in
one way an old one dating back to the 18th
century and the so called ”enlightenment”
era.
• It is related to different set of problems but
refers to a given starting-point:
• How do we get rid of poverty and what is
progress for societies?
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• From another point of view it is a fairly new
debate and it became widesperead after the
second world war.
• The reasons for this new popularity may be
due to three different conditions related to
new political agendas in the post-war era.
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• 1 Post-war reconstruction
• After the war in Western Europe there was a
question about the sustainability of capitalism.
The volatile socio-economic conditions during the
inter-war years were blamed for creating the preconditions for the war. If capitalism should
survive it has to become more stable and
guarantee continual progress for the population.
The hope stood to keynesian macro-economic
policy and various methods of planning of
economic activities.
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• 2 De-colonialization
• De-colonization which followed the world war
raised the question concerning which way the
new independant states should choose in
order to develop their countries and reduce
poverty. This new independancy also raised
the question of relations between rich and
poor countries, former colonies and former
colonial powers.
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• 3 Challenge from russian revolution
• The influence of the Soviet Union had increased
considerably in the years between 1945 and
1950. At the time there was a growing interest for
the Soviet growth model based on a planned
investment-driven economy. In the coming
decades there was a lot of discussion on the
”competition between the two system” and
Soviet Union economy seemed to grow very fast
and challenged US economic and technological
leadership.
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• The key concept in this discussion was on
economic growth. Even if everybody didn´t
restrict the problem of development to
economic growth, it became the focal point of
discussion: economic growth was the key to
economic and social development.
• W.W. Rostows book ”Stages of economic
growth: a non-communist manifesto” was
published in 1960.
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• Rostow was an american economist and advisor
to president John F Kennedy.
• He argued that in a capitalist regulated economy
all countries should sooner or later come to a
”take-off” for economic growth if they made the
institutional and economic preparations. Every
country could not ”take-off” at the same time
because the world economy had not economic
space for everybody att the same time. Just as at
an airplane all the plane can´t take-off
simultaneously.
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• Western economic growth and its
critics
• Rostow definitely favoured an US-led global growth
strategy.
• His opponents were both ”dependancy”-economists,
”structural” economists and marxists. In various ways
these critics underlined the conflicting interests in the
world economy. Dependancy economists favoured ”delinking” from the rich countries and marxists stressed
the exploitive relationships between imperialist firms
and states on the one hand and poor countries on the
other. They advocated mostly independacy and central
planning.
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• It was not until the 1970-ties economic growth became
more universally questioned as the key for economic
and social development.
• The Rom-report ”Limits to growth” stressed the
ecological costs of ongoing universal growth.
• Among critics the british economist F. Hirschs book
”Social limits to growth”(1977) argued that economic
growth just solve a limited part of development
problems and actually leads to waste of time and
resources. This is because we become accustomed to
standard rises and we beome occupied by a useless
competition on ”positional” goods and utilities which is
actuallu a zero-sum game.
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• Development as freedom
• Amartya Sens book argues in a different way.
• His background is that as an growth economist
• During the seventies his interests came to
include project evaluation methods and the
more general problems of poverty.
• He also studied moral philosophy.
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• The general idea of the book is included in the
opening sentences
• ”Development can be seen … as a process of
expanding the real freedoms that people
enjoy. Focusing on human freedoms contrasts
with narrower views of development, such as
identifying development with the growth of
gross national product, or with the rise of
personal incomes, or with industrialization, or
with technological advance, or with social
modernization.”
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• The radical break with equalising economic
growth with development is to note that
growth or things are just means for wellbeing.
• The development should rather be
understood as the peoples possibilities to live
the lives they esteem to live.
• And the focus of action is to remove the
obstacles for this goal.
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Key concepts:
Agency
Capabilities
Functionings
• Enjoy your readings
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