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The Political Economy of Development Economics - A Historical Perspective

Paper Session

Friday, Jan. 6, 2017 7:30 PM – 9:30 PM

Hyatt Regency Chicago, Soldier Field
Hosted By: History of Economics Society
  • Chair: Mauro Boianovsky, University of Brasilia

The Political Element in Theories of American Economic Development, from the Founding to the Closing of the Frontier

Stephen Meardon
,
Bowdoin College

Abstract

Since its founding, especially before the late-19th c. closing of its frontier, the <br />
<br />
United States has been a laboratory for the creation and application of theories <br />
<br />
of economic development.  The premise has been that a new nation with <br />
<br />
abundant land and separation from the institutions and antagonisms of Europe <br />
<br />
will develop differently.  Economic thinkers including Jefferson, Hamilton, <br />
<br />
Mathew and Henry Carey, Cardozo, and Henry George shared the premise but <br />
<br />
were inspired differently by it.  The differences are attributable to the influences <br />
<br />
of contemporary political causes and to the thinkers’ notions of the roles of <br />
<br />
ideology and ingenuity in economic development.

When the History of Ideas Meets Theory: Arthur Lewis and the Classical Economists on Development

Mauro Boianovsky
,
University of Brasilia

Abstract

Arthur Lewis (1954, 1955) seminal article and book on economic<br /><br />
<br /><br />
development represented a return to the classical approach, especially as put forward <br /><br />
<br /><br />
by Adam Smith and David Ricardo. This paper investigates the use made by Lewis of <br /><br />
<br /><br />
history of economic thought in the elaboration of his model of economic development <br /><br />
<br /><br />
with unlimited labor supply. Lewis’s first exposition to classical economics took <br /><br />
<br /><br />
place as a student of Lionel Robbins at the LSE in the 1940s. Lewis believed the <br /><br />
<br /><br />
historical experience of the British Industrial Revolution was behind much of the <br /><br />
<br /><br />
classical approach to economic growth and, moreover, was also relevant to the <br /><br />
<br /><br />
industrialization of underdeveloped countries in the post-war period. As part of his <br /><br />
<br /><br />
treatment of the relation between income distribution, capital accumulation and <br /><br />
<br /><br />
growth, Lewis discussed critically topics such as Malthusian population theory, <br /><br />
<br /><br />
Marx’s falling rate of profit hypothesis, the debate between Ricardo and Malthus on <br /><br />
<br /><br />
effective demand and accumulation, and the notion – conspicuous in the debate about <br /><br />
<br /><br />
secular stagnation – of a stable ratio between capital and output.

The Making of Behavioral Development Economics

Karla Hoff
,
World Bank
Allison Demeritt
,
World Bank

Abstract

Any discipline that aims to explain human behavior needs to account for human thought processes. Yet consideration of how humans actually make decisions is very new to economics. The first strand of behavioral economics, due to Kahneman and Tversky, showed that preferences are “frame-bound”: different, but formally equivalent, frames influence preferences in systematic ways. The second strand of behavioral economics, which is central to development economics, recognizes that many frames are conceptual, rather than contextual, and are learned from experience of, or exposure to, social patterns. Past experience can shape bad trajectories because most human decision are based not on deliberate but rather on automatic thinking, which relies uncritically on mental models and is slow-learning. Dysfunctional mental models can persist. By providing experience of, or exposure to, new role models and narratives, there is evidence that interventions can change dysfunctional mental models of many people at more or less the same time and thereby promote economic development. Long-run, ongoing evaluations of short-term anti-poverty interventions give evidence that they may change endowments, aspirations, and other mental models in complementary and self-sustaining ways that break intergenerational transmission of poverty or permit adults to actually graduate from extreme poverty.
Discussant(s)
Wade Hands
,
University of Puget Sound
Sandra Peart
,
University of Richmond
Amitava Krishna Dutt
,
University of Notre Dame
JEL Classifications
  • B0 - General
  • O1 - Economic Development