The birth and growth of development economics

World leaders meeting at the United Nations in New York, 2015
World leaders meeting at the United Nations in New York, 2015

By Eric Kashambuzi

The world is once again confronted with serious challenges of backwardness, unemployment and underemployment, vulnerability, inequality, insecurity, exclusion, mass poverty and its offshoots of hunger, disease and illiteracy whose solution require an integrated multi-sector and coordinated approach.

In search for a lasting solution, world leaders met in 2015 at the United Nations in New York and adopted a 2030 Agenda for Sustainable Development, thereby launching a new development paradigm shift from neo-liberalism that had emphasized economic growth, guided by market forces and private sector. The invisible hand would distribute the benefits of economic growth through a trickle-down mechanism. The role of the state in the economy had been drastically reduced because the state was considered to be the problem and not the solution to the daunting economic and social challenges.

The neo-liberal paradigm implemented through structural adjustment programs or the Washington consensus from the 1980s led to serious economic, social and environmental problems especially in Latin American and African countries that it was eventually abandoned in 2009. In April 2009 “The British Prime Minister, Gordon Brown, claimed that this G20 summit marked the end of the ‘Washington Consensus’” (Peter Clarke 2009).

Increasingly, governments are restoring ministries of planning and economic development to direct their economies through five-year development plans. Thus, the new paradigm shift has returned development economics that was pioneered largely by policy makers in the late 1940s and the 1950s to address the development challenges of African, Asian and Latin American countries (Gerald M. Meir and Dudley Seers 1984).

In this article, we shall trace the major development debates, studies and commissions and recommendations for action from the 1940s when studies concluded that many countries suffered from underdevelopment and backwardness and called for intervention to design measures to address the problems of industrialization, terms of trade, accelerated growth and population pressure including in ‘depressed areas’. To overcome these problems, “state intervention was believed necessary…” to accelerate economic growth and attain full employment (Gerald M. Meir and Dudley Seers 1984).

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