The aim of this essay is to assess mainstream development strategies during the 20th century, ending at the 1980s and 1990s with the Washington consensus. The essay will begin with a description of the nature of the early development period, which was largely based, inter alia, on growth theory, Keynesian approaches and ‘unorthodoxy’ characterized by export pessimism and import substitution. Afterwards, the development strategies of the ‘lost decade of development’, will be assessed. This period saw the rise of neoliberalism, the monetarist counterrevolution, and general policy shifts toward the right. It was characterized by a promotion of free markets, a downplay of state intervention, and the prominence of free trade and export promotion for economic growth.
Frequently asked questions
What are the key themes discussed in the provided text on development economics?
The text primarily discusses the evolution of development economics with a focus on trade, markets, and the role of the state. It contrasts Keynesian developmentalism with neoliberal approaches, examining the impact of Structural Adjustment Programs (SAPs) and the Washington Consensus.
What is the significance of Keynesianism in the context of early development economics, according to the text?
The text indicates that Keynesianism was the dominant economic theory after World War II. It was understood that orthodox economics was only a special case of a fully employed economy. Early development economics was distinct and not merely an application of orthodox economics.
What is "export pessimism" and how did it relate to early development economics, as described in the text?
Export pessimism refers to a negative view of the benefits of international trade, common in early development economics. It led to a preference for import-substitution policies. This position was later challenged by those advocating for open economies and export-oriented strategies.
What role did the state play in early development strategies, according to the text?
Both Eastern socialist and Western capitalist development strategies emphasized the state's role in coordinating investment and guiding the economy towards modernization. This included state-led industrialization, even with support from the World Bank.
What are the main criticisms of the Washington Consensus and Structural Adjustment Programs (SAPs), as presented in the text?
The text critiques the Washington Consensus for its one-size-fits-all approach, disregarding national contexts. SAPs are criticized for short-term focus, deepening commodification, increasing inequality, financial instability, ecological degradation, and class injustice.
What is the alternative view to neoliberal policies that the text presents?
The text suggests that the pendulum swung too far in the direction of neoliberal policies, advocating for a more balanced approach that recognizes the complementarity between the public and private sectors. It references arguments for "reinvigorating the state's capability" and the importance of considering national characteristics in development strategies.
What are some of the key references cited in the document regarding development strategies?
The text cites works by Nurkse (1953), Rosenstein-Rodan (1943), Lewis (1954), Krugman (1995), Bhagwati (1988), Berg (1981), Krueger (1990), Stiglitz (2004), Todaro and Smith (2015), Rodrik (2000), and others, indicating a breadth of research considered in the analysis of development economics.
What is the conclusion of the essay as outlined in the HTML snippet?
The conclusion, quoting Rodrik (2000:86), states that "we enter the 21st century with a better understanding of the complementarity between markets and the state-a greater appreciation of the virtues of the mixed economy. That is the good news".
- Quote paper
- Abel Gaiya (Author), 2016, A Brief History of Orthodox Development Theory, Munich, GRIN Verlag, https://www.grin.com/document/429689