Chapter3 History - de Janvry and Sadoulet Chapter 3 History...

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de Janvry and Sadoulet 1 9/4/10 Chapter 3 History of development and history of thought in development economics: Why history matters September 4, 2010 1. Introduction: Why history matters History matters in understanding patterns of development and underdevelopment across countries . For example, underdevelopment in Sub-Saharan Africa today cannot be understood without reference to the massive extraction of slaves and the division of Africa across European colonial powers in the 1884 Berlin Conference following boundaries that had no correspondence with ethnic territories. By 1900, 90% of Africa was under European control (Landes, 1999). History of thought in development economics also matters in understanding why particular interpretations of underdevelopment were proposed and how they translated into the development policies that affect where we are today. History and thought are inextricably related: events shaped thought and thought shaped policy. We can say that thought in development economics that matters for modern development started with mercantilism and the first colonial period in 1500. We consequently need to cover 500 years of history of development and underdevelopment to understand what we see today, clearly a major challenge in a brief chapter. But details matter less than the logic of the evolution of thought in relation to events and ideology. This is what we present here. 2. Basic principles in analyzing the history of thought in development economics We follow four principles in analyzing the history of thought in development economics: 1) Development and underdevelopment are linked . Development and underdevelopment at a world scale are part of a single process . Hence, it would be a serious error to analyze underdevelopment as separate from development. This is because countries have been linked through the history of slavery and colonialism, resource extraction through unequal benefits from trade and often plunder, the international transmission of price shocks and economic crises, foreign direct investment, geopolitics such as the spread of 1. History matters in understanding today’s patterns of development and under-development: there is strong path dependency in crafting today’s economic capacities and institutions. 2. While most of the determinants of development outcomes are internal to countries, development and under-development are linked as part of an overall historical process that had both winners and losers. 3. Development requires a balance between the roles of the market, the state, and civil society. Different schools of thought have given different relative importance to these three elements in enhancing development outcomes. 4. Schools of thought can only be understood by reference to the specific historical context where they
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This note was uploaded on 02/09/2011 for the course ECON c171 taught by Professor Alaindejanvry during the Fall '10 term at University of California, Berkeley.

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Chapter3 History - de Janvry and Sadoulet Chapter 3 History...

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