Development economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example, through health, education and workplace conditions.
One way to approach development economics is to ask why certain societies adopt institutional structures that are conducive to successful economic performance, while others do not.
Reviving Development Economics is both crucial and full of challenges and dilemmas [...] The biggest obstacle to such a revival is the neo-liberal economic climate that has informed global economic policy making since the early 1980s----and in particular the policy prescriptions that the US and UK governments have championed both at home and overseas since then and the role of the international financial institutions (IFIs) and World Trade Organisation (WTO) which are heavily influenced by them. The United Nations system also appears increasingly constrained by the policies of these governments both for financial and other reasons.
Investor Robert E. King and his wife have given $150 million (part of which is a challenge grant) to found the Stanford school’s Institute for Innovation in Developing Economies, which will informally be known as SEED. It will join the other work being done to identify and remediate social, cultural, physical and legal barriers to uplift from poverty. This gathering “science” is aimed at tackling the huge pockets of the world’s population that have defied past efforts at aid and development.
Much of development economics had been viewed as asking how developing countries could successfully transition toward the kinds of market-oriented policy frameworks that came to be called “American style capitalism.” The debate was not about the goal, but the path to that goal, with some advocating “shock therapy,” while others focused on pacing and sequencing—a more gradualist tack. The global financial crisis has now raised questions about that model even for developed countries.
Development is about big systemic changes, complex tradeoffs, political choices and how the fruits of growth are channeled for the greater good. It is also about broadening opportunities – a goal that if neglected can result in frustrated citizens and tumult as we have seen in the North Africa and Middle East.
A major resurgence is evident in development economics as many leading economists and economics departments around the world have begun to focus again on development issues over the past decade or two and premier scholarly recognition – Nobel Prizes, John Bates Clark Medals, MacArthur “genius” awards and the like – has been bestowed on eminent scholars working within development economics. This reflects a natural return to development economics’ proper place within the broader discipline.
Unlike the early “social experiments” conducted in the United States—with their large bud- gets, large teams, and complex implementations—many of the randomized evaluations that have been conducted in recent years in developing countries have had fairly small budgets, making them affordable for development economists. Working with local partners on a smaller scale has also given more flexibility to researchers, who can often influence program design. As a result, randomized evaluation has become a powerful research tool.
…in addition to the analysis of economic growth, the study of economic development must investigate the influences of institutional and cultural factors on economic growth as well as the impacts of economic growth on those factors.
Economic development is the primary objective of the majority of the world's nations. […] To raise the income, well-being, and economic capabilities of peoples everywhere is easily the most crucial social task facing us today.
Economic development is that process by which people are lifted from the level of poverty and simultaneously their basic needs are satisfied. A country cannot be called developed one till it satisfies the basic needs like food, clothing, housing, primary eduction and health, of all its people.
…development economics […] has not come up with a well-articulated theory of institutions suitable for a world populated with heterogeneous economies that have checkered histories and are at different stages of development.
For development economics, mutual gains can be realized only after legitimate departures from the orthodox case for free trade which must be enforced by government action both nationally and internationally. In practice, therefore, whilst not going as far as the neo-Marxists in their desire to smash the whole world capitals system based on 'unequal exchange', development economists nevertheless accept that developing countries are 'unequal partners' in the current world trading and payment system, and that the rules of the game of the liberal international economic order must be changed to serve their interests.