The Review of Austrian Economics

, Volume 31, Issue 4, pp 439–455 | Cite as

Austrian economics and development: The case of Sudha Shenoy’s analysis

  • Giandomenica BecchioEmail author


The aim of this paper is to describe Sudha Shenoy’s use of Menger, Mises, and Hayek (she explicitly called them ‘the older Austrians’) to explain development and growth. Her aim was to show that the application of Austrian economics, based on the notions of capital structure and division of labor, embedded in a specific legal framework (common law), historically promoted development and growth (as in early modern England); and can promote development and growth in underdeveloped countries (her specific focus was India). Shenoy also claimed that any policymaking as well as government’s intervention are either useless or dangerous, having two main dysfunctional effects, which are often interrelated; namely, make development slower (or even stop it), and increase corruption.


Development Capital structure Division of labor Catallaxy Common law Economic plan 

JEL classification

B25 B31 B53 



I want to thank William Butos, David Harper, Shruti Rajagopalan, Mario Rizzo, Joseph Salerno, and other participants to NYU Colloquium on Market Institutions and Economic Processes, along with two anonimous referees, for their helpful suggestions and comments. All mistakes remain mine.


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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Economic and Social Sciences, Statistics and MathematicsUniversity of TorinoTorinoItaly

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