Rethinking Economic Development Growth And Institutions

Presents the contributions that early development theory can make to growth economics in answering why some countries are richer than others and why some economies grow faster than others.

Productive transformation requires seizing the opportunities available and opening new ones in a competitive world. Rethinking Productive Development examines the market failures impeding transformation and the government failures that may make the policy remedies worse than the market illness. To address market failures, the authors propose a simple conceptual framework based on the scope and nature of the policy approach. They then systematically analyze country policies through this lens in key areas such as innovation, new firms, financing, human capital, and internationalization to show the power of this way of thinking. Still, the book warns that policymakers cannot be sure what the right policy interventions are and must set up a process to discover them that calls for public-private collaboration. Recognizing that the risk of capture needs to be checked and that even the best policies will fail without the technical, organizational, and political capacity to implement them, the book concludes with ideas on how to design institutions fostering the right incentives and how to grow public sector capabilities over time.

This title represents the most forward thinking and comprehensive review of development economics currently available.

This book provides an innovative framework to analyze the process of industrial upgrading and diversification, a key feature of economic development. Based on this framework, it provides concrete advice to development practitioners and policy makers on how to unleash a country's growth potential.

This book presents a general theory of the economics of prosperity. Drawing upon both historic and contemporary Austrian economic thinking, it looks beyond merely identifying various isolated causes of economic growth and development to describe and explain the process of economic progress. It brings together various economic principles related to production, exchange, the market division of labor, capital, technology, entrepreneurship, and economic calculation, and a further understanding of how different institutional settings and specific policies all affect the process of economic progress. It also provides a helpful critique of modern growth theory.

Why are some countries richer than others? Why do some economies grow so much faster than others do? Do economies tend to converge to similar levels of per capita income? Or is catching up simply impossible? If modern technology has shown the potential to raise living standards to first-world levels, why is it that the vast majority of the world's population lives in poverty in underdeveloped countries? These questions have been at the heart of development economics since its inception several decades ago and are now at the center of the research agenda of the modern economics of growth. This book reviews the answers to these questions in the contemporary fields of growth theory and comparative development. It is a sequel to Development Theory and the Economics of Growth published in 2000 with the aim to vindicate the theoretical insights and accumulated empirical knowledge of classical development economics and to integrate them into the mainstream of modern growth economics. The growth and development fields have expanded in the last twelve years in welcome directions that aim to deepen our understanding of the fundamental determinants of comparative development. This new book evaluates these new directions, including developments in endogenous growth theory and economic geography as well as the rise and challenge of the new institutional economics, in the light of the earlier, classical contributions to development theory.

In this volume a group of eminent economists and other social scientists seek to present an innovative new approach to economic development, drawing in part from certain heterodox intellectual traditions within economics as well as from the other social sciences. The intention is to point the way theoretically to a much more sophisticated understanding of economic development. The ultimate prize, they show, by grounding theory in a more accurate analysis of social change, is policies that really will deliver higher economic growth and greater social justice worldwide.

The study of development in low-income countries is attracting more attention around the world than ever before. Yet until now there has been no comprehensive text that incorporates the huge strides made in the subject over the past decade. Development Economics does precisely that in a clear, rigorous, and elegant fashion. Debraj Ray, one of the most accomplished theorists in development economics today, presents in this book a synthesis of recent and older literature in the field and raises important questions that will help to set the agenda for future research. He covers such vital subjects as theories of economic growth, economic inequality, poverty and undernutrition, population growth, trade policy, and the markets for land, labor, and credit. A common point of view underlies the treatment of these subjects: that much of the development process can be understood by studying factors that impede the efficient and equitable functioning of markets. Diverse topics such as the new growth theory, moral hazard in land contracts, information-based theories of credit markets, and the macroeconomic implications of economic inequality come under this common methodological umbrella. The book takes the position that there is no single cause for economic progress, but that a combination of factors--among them the improvement of physical and human capital, the reduction of inequality, and institutions that enable the background flow of information essential to market performance--consistently favor development. Ray supports his arguments throughout with examples from around the world. The book assumes a knowledge of only introductory economics and explains sophisticated concepts in simple, direct language, keeping the use of mathematics to a minimum. Development Economics will be the definitive textbook in this subject for years to come. It will prove useful to researchers by showing intriguing connections among a wide variety of subjects that are rarely discussed together in the same book. And it will be an important resource for policy-makers, who increasingly find themselves dealing with complex issues of growth, inequality, poverty, and social welfare.

Productive transformation requires seizing the opportunities available and opening new ones in a competitive world. Rethinking Productive Development examines the market failures impeding transformation and the government failures that may make the policy remedies worse than the market illness. To address market failures, the authors propose a simple conceptual framework based on the scope and nature of the policy approach. They then systematically analyze country policies through this lens in key areas such as innovation, new firms, financing, human capital, and internationalization to show the power of this way of thinking. Still, the book warns that policymakers cannot be sure what the right policy interventions are and must set up a process to discover them that calls for public-private collaboration. Recognizing that the risk of capture needs to be checked and that even the best policies will fail without the technical, organizational, and political capacity to implement them, the book concludes with ideas on how to design institutions fostering the right incentives and how to grow public sector capabilities over time.