Development economics in historical context

UnderstandingSociety: Development economics in historical context

Hollis Chenery and T. N. Srinivasan published the Handbook of Development Economics in 1988. It was state-of-the-art in the late 1980s. It is interesting to look back at the Handbook twenty-two years later to see how it stands up today.

First, the contributors. The volume is a dream-team of development thinkers from the 1970s and 1980s: Amartya Sen, Arthur Lewis, Pranab Bardhan, Joseph Stiglitz, Peter Timmer, Nancy Birdsall, Paul Streeten, and Dwight Perkins, to name only a small subset of the authors. (There are 33 essays in volumes I and II.) Several currently important figures are not represented -- Arturo Escobar, Jeffrey Sachs, and Dani Rodrik, for example. Escobar's Encountering Development: The Making and Unmaking of the Third World appeared in 1994; Jeffrey Sachs's The End of Poverty: Economic Possibilities for Our Time didn't appear until 2005; and Dani Rodrik's One Economics, Many Recipes: Globalization, Institutions, and Economic Growth appeared in 2008. So it is certainly true that the field has moved forward with the emergence of new voices and perspectives since 1988. But it is also true that the volume represents a very deep body of knowledge about some of the dynamics and policy choices pertaining to economic development.

More important is the question of the range of perspectives on development represented in the volume. Development thinking has tended to swing from progressive to neo-liberal over the decades. Progressives have paid more attention to distribution, poverty, and social provisioning; whereas neo-liberals have focused on markets and "getting the prices right," with little appetite for redistribution, government subsidies, or serious efforts at poverty reduction. Gunnar Myrdal, Amartya Sen, and Arturo Escobar represent three generations of progressive development theorists; perhaps Peter Timmer, Malcolm Gillis, and Jeffrey Williamson fall closer to the neo-liberal end of the spectrum. I would judge that the Handbook does a pretty good job of finding the middle of the spectrum. Chenery's own emphasis on the importance of redistribution in development (Redistribution with Growth) places him closer to the progressive end, along with Pranab Bardhan, Irma Adelman, and Lance Taylor (each of whom has a contribution in the volume). The book pays attention to "alternative approaches" to economic development as well as poverty-related issues like health and nutrition. The book does a good job of combining a clear vision of the goals of economic development -- improvement of human welfare -- with technical economic analysis of growth, labor markets, and trade. And many of the authors explicitly recognize the point that development economics benefits from theoretical pluralism; the approach is not narrowly neo-classical.