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

Although there was consensus that serious challenges existed, there were disagreements about the causes and how they should be addressed. Some argued that it was the adverse tropical conditions characterized by high temperatures and humidity; low and irregular rainfall in amount, timing and duration; poor soils; lack of natural resources; high disease burden, high densities and rapid population growth (Pierre Gourou 1980; W.T.W. Morgan 1969 and Gerald M. Meir and Dudley Seers 1984). Priority recommended measures included reduction in population growth (Adam Roberts and Benedict Kingsbury 1988). Others emphasized agricultural development because these countries were still very largely agricultural.

These underdeveloped countries would continue their comparative advantage of growing cheap foodstuffs and commodities for export in exchange for manufactured products from industrialized countries. Yet others reasoned that agricultural and manufacturing development should be undertaken together (B.H. Hodder 1968). However, the prices of foodstuffs, agricultural and mineral commodities would be increased and stabilized in international markets to improve their foreign exchange earning capacity while manufacturing would result in value addition and higher product prices.

In response to these problems in underdeveloped countries, President Harry Truman stated in his 1949 inaugural address that America should embark “on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas” (Wolfgang Sachs 1992). The United Nations conducted development studies and produced three reports. The first report: National and International Measures for Full Employment. It was published in 1949. Its purpose was to prevent recurrence of the 1930s economic depression. The second report: Measures for the Economic Development of Under-Developed Countries. It was published in 1951. The report emphasized what obstacles had to be overcome to promote development. The building of physical infrastructure such as roads and energy was singled out as one of the missing components that needed urgent attention.

Surplus labour could be used without undermining agricultural production. The third report: Measures for International Economic Stability. It was published in 1951. The report highlighted the special difficulties of the poorer underdeveloped countries that later became the Least Developed Countries (LDCS). “It advocated international action to reduce the vulnerability of underdeveloped economies to fluctuations in the volume of trade, to promote a larger flow of international capital, to maintain steady development programs, and to reduce fluctuations in the prices of primary products” (Gerald M. Meir and Dudley Seers 1984).

By and large, it was emphasized that these efforts would apply the economic growth model, and not distribution (Wolfgang Sachs 1992). In other words, “During the pioneering period most economists came to interpret economic development as denoting growth in per capita real income in underdeveloped countries. Some, however, emphasized that development meant growth plus change, especially change in values and institutions” (Gerald M. Meir and Dudley Seers1984).

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