Development economics
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Development economics is a branch of economics that deals with economics in a low income environment. This may involve using mathematical methods from dynamical systems like differential equations and inter-temporal optimization, or it may involve a mixture of quantitative and qualitative methods. Unlike classical economics, development economics incorporates social and political strategies to devise particular plans for development in third world countries. In this way, development economics does not rely simply on classical economic theory.
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[edit] Topics of Research
Development economics also includes topics such as Third World debt, and the functions of such organisations as the International Monetary Fund and World Bank. Many economists in this field are interested in ways of promoting stable and sustainable growth in poor countries and areas, by promoting self reliance and education in some of the lowest income countries in the world. Where economic issues merge with social and political ones, it is referred to as development studies.
[edit] Criticisms
Per capita Gross Domestic Product (GDP per head) is used by many developmental economists as an approximation of general national well-being. However, these measures are criticized as not measuring economic growth well enough, especially in countries where there is much economic activity that is not part of measured financial transactions (such as housekeeping and self-homebuilding), or where funding is not available for accurate measurements to be made publicly available for other economists to use in their studies (including private and institutional fraud, in some countries). Even though per-capita GDP as measured can make economic well-being appear smaller than it really is in some developing countries, the discrepancy could be still bigger in a developed country where people may perform outside of financial transactions an even higher-value service than housekeeping or homebuilding as gifts or in their own households, such as counseling, lifestyle coaching, a more valuable home décor service, and time management. Even free choice can be considered to add value to lifestyles without necessarily increasing the financial transaction amounts. More recent theories of Human Development have begun to see beyond purely financial measures of development, for example with measures such as medical care available, education, equality, and political freedom. One measure used is the Genuine Progress Indicator, which relates strongly to theories of distributive justice. Actual knowledge about what creates growth is largely unproven; however recent advances in econometrics and more accurate measurements in many countries is creating new knowledge by compensating for the effects of variables to determine probable causes out of merely correlational statistics.
[edit] Recent developments
The most prominent contemporary development economist is perhaps the Nobel laureate Amartya Sen. Recent theories revolve around questions about what variables or inputs correlate or affect economic growth the most: elementary, secondary, or higher education, government policy stability, lack of trade barriers, fair court systems, available infrastructure, availability of medical care, prenatal care and clean water, ease of entry and exit into trade, and equality of income distribution (for example, as indicated by the Gini coefficient), and how to advise governments about macroeconomic policies, which include all policies that affect the economy. Education enables countries to adapt the latest technology and creates an environment for new innovations. The cause of limited growth and divergence in economic growth lies in the high rate of acceleration of technological change by a small number of developed countries. These countries’ acceleration of technology was due to increased incentive structures for mass education which in turn created a framework for the population to create and adapt new innovations and methods. Furthermore, the content of their education was composed of secular schooling that resulted in higher productivity levels and modern economic growth.
[edit] Further reading
- Jomo K.S. (2005), Pioneers of Development Economics: Great Economists on Development, Zed Books - the contributions of economists such as Marshall and Keynes, not normally considered development economists
- Gerald M. Meier (2005), Biography of a Subject: An Evolution of Development Economics, Oxford University Press
- Gerald M. Meier, Dudley Seers[editors] (1984), Pioneers in Development, World Bank ([1])
- Jeffrey D. Sachs (2005), The End of Poverty: Economic Possibilities for Our Time, Penguin Books
- Ben Fine and Jomo K.S. (eds, 2005), The New Development Economics: Post Washington Consensus Neoliberal Thinking, Zed Books
- Peter Griffiths (2003), The Economist's Tale: A Consultant Encounters Hunger and the World Bank, Zed Books
- George Mavrotas and Anthony Shorrocks (eds, 2007), Advancing Development: Core Themes in Global Development, Palgrave Macmillan
- World Institute for Development Economics Research Publications/Discussion Papers
- The Center for Global Development
[edit] See also
- Development studies
- Development wave
- Social development
- Important publications in development economics
- Sustainable development
- Economic development
- International development
- UN Human Development Index
- Gini coefficient
- Lorenz curve
- Harrod-Domar Model
- Debt relief
- Arthur Lewis (economist)
- Walt Whitman Rostow
- Poverty Action Lab
- Innovations for Poverty Action
[edit] External links
- Development Economics and Economic Development A list of resources on development economics
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