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Do Economists Influence the Developing World?

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Abstract

On accepting his Nobel Prize in Economics, Professor Theodore Schultz stated that ‘Most of the people in the world are poor, so if we knew the economics of being poor we would know much of the economics that really matters’.1

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Notes

  1. Theodore W. Schultz, ‘Nobel Lecture: The Economics of Being Poor’, Journal of Political Economy, 88(4) (August 1980): 639.

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  2. Arnold Harberger (ed.), World Economic Growth (San Francisco: ICS Press, 1984): 428–36.

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  3. A World Bank study of trade reforms in 36 countries between 1945 and 1984 showed that in nine of the 36 cases, trade reforms were only partially sustained, and in 12 of the 36, the reforms completely collapsed. M. Michaely et al., Liberalizing Foreign Trade in Developing Countries (Washington, DC: World Bank, 1990).

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  4. Another study illustrates the failure to implement structural adjustment programmes in a number of Latin American countries. John Williamson, Progress of Policy Reform in Latin America (Washington, DC. Institute of International Economics, 1990).

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  5. This chapter is an adaptation of some points elaborated at greater length, especially with respect to the limitations of the NPE, in Gerald M. Meier, ‘Do Development Economists Matter?’, Dudley Seers Memorial Lecture, IDS Bulletin, 20(3) (July 1989): 17–25;

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  6. Gerald M. Meier (ed.), Politics and Policymaking in Developing Countries, an International Center for Growth publication, (San Francisco: ICS Press, 1991) chs 1 and 12.

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  7. Other complementary articles are T. N. Srinivasan, ‘Neoclassical Political Economy, the State and Economic Development’, Asian Development Review, 3 (1985): 38–58; Symposium on ‘The State and Economic Development’, Journal of Economic Perspectives, 4(3) (Summer 1990): 3–74.

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  8. I. M. D. Little, Economic Development (New York, Basic Books, 1982) Part III.

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  9. Deepak Lal, ‘The Political Economy of the Predatory State’, World Bank Discussion Paper, DRD105 (Washington, DC: World Bank, 1984).

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  10. Adapted from J. Alt and K. A. Chrystal, Political Economics (Berkeley: University of California Press, 1983): 28–9.

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  11. See Michael Lipton, Why Poor People Stay Poor (Cambridge, MA: Harvard University Press, 1977).

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  12. Robert H. Bates, ‘Governments and Agricultural Markets in Africa’, in D. Gale Johnson (ed.), The Role of Markets in the World Food Economy (Boulder, CO: Westview Press, 1983).

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  13. Bates, ‘Governments and Agricultural Markets in Africa’: 345–58; Robert H. Bates and William P. Rogerson, ‘Agriculture and Development: A Coalitional Analysis’, Public Choice, 35 (1980): 513–27.

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  14. Anne O. Krueger, ‘The Political Economy of the Rent-Seeking Society’, American Economic Review 69,(3) (1974): 291–303.

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  15. For example, Stanley Wellisz and Ronald Findlay, ‘Protection and Rent-Seeking in Developing Countries’, in David C. Colander (ed.), Neoclassical Political Economy (Cambridge, MA: Ballinger, 1984): 148–51.

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  16. James M. Buchanan, for example, observes that ‘Participants in the political decision process seek to maximize their own utilities, given the instruments available to them. They may only be secondarily interested in their shares in the efficiency gains that idealized market correction might promise... The overall conclusion remains the negative one that politicization of market failures will be highly unlikely to secure the objective of moving the economy toward satisfaction of the idealized efficiency norm so long as the political process itself embodies the expressions of differential interest by citizens’. James M. Buchanan, ‘Market Failure and Political Failure’, Cato Journal, 8(1) (Spring-Summer 1988): 9.

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  17. For an insightful exposition of the constructive role of politics, see Merilee Grindle, ‘The Limitations of the New Political Economy: Positive Economics and Negative Politics’, in Meier (ed.), Politics and Policymaking in Developing Countries, 1991 Chap. 3.

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  18. Deepak Lal, ‘The Political Economy of Economic Liberalization’, World Bank Economic Review, 1(2) (January 1987): 273–300.

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  19. Jagdish Bhagwati, ‘Export-Promoting Trade Strategy’, World Bank Research Observer, 3(1) (January 1988): 41.

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  20. Albert O. Hirschman, Journeys Toward Progress (New York, Twentieth Century Fund, 1963): 52, 61, 157, 229–35.

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  21. For an instructive analysis of how reformists can weigh political resources and bureaucratic resources to increase the probability of successfully implementing a policy reform, see John W. Thomas and Merilee S. Grindle, ‘After the Decision: Implementing Policy Reforms in Developing Countries’, World Development 18(8) (August 1990): 1163–81.

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  22. A notable contribution in this direction is provided by Douglass C. North, Institutions, Institutional Change, and Economic Performance (Cambridge: Cambridge University Press) 1990.

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  23. See also Special Issue of World Development, 17(9) (September 1989) on ‘The Role of Institutions in Economic Development’.

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© 1992 Soumitra Sharma

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Meier, G.M. (1992). Do Economists Influence the Developing World?. In: Sharma, S. (eds) Development Policy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-22385-5_2

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