Economics in Low-Income Countries

I came across Ingrid Kvangraven‘s very thoughtful review of Alternative Theories of Economic Development over at Developing Economics. The book sounds like a rehashing of the standard critiques of contemporary research in the field of development economics, some which tend to fall squarely in the caricature column. That said, caricatures can sometimes be useful in forcing us to reconsider core assumptions. In particular, I think the field of development economics has yet to deal with the problem of being “a tool-driven profession, where the tools determine the types of questions that are possible to ask as well as the type of analysis possible to carry out.”

For instance, I love most of the exciting micro work in development economics, but would certainly be interested in reading more books or papers covering big picture macro topics in developing countries. I also realize that economists from developing countries are the best-placed (in terms of incentives and access to information) to try and answer some of the big picture questions that do not always lend themselves to empirical analyses.

Here are some excerpts:

The editors also emphasize the increasing focus on methods in the field of development economics, rather than theory and history (in line with my own observation). The editors argue that the field has developed into a tool-driven profession, where the tools determine the types of questions that are possible to ask as well as the type of analysis possible to carry out. For example, as pointed out by Viner (1937), increasing returns was removed from international trade theory because it was not compatible with equilibrium. As Paul Krugman (1991) puts it: Economics came to “follow the line of least mathematical resistance”.

screen-shot-2017-02-14-at-3-49-26-pmThe editors also find that the basic fact of uneven development tends to be reduced to models of “dualism,” which implies less attention to the differentiation internal to sectors, and patterns of interaction of different groups of classes within and across sectors. Furthermore, when it is discovered that certain institutions are different from “the norm” in developing countries, they are highlighted and explained using the same basic analytical tools developed for the norm. This type of Economics is what the editors call a National Geographic view of the broader process of development, as only snapshots of particular institutions or economic activities are separated for the analysis.

You can read the whole thing here.

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