Publication: Early Development Economics Debates Revisited
Loading...
Published
2007-12
ISSN
Date
2012-06-08
Author(s)
Editor(s)
Abstract
Development economics in its early years created the image of a fierce fight between advocates of contrasting theories or approaches- "balanced growth" vs. "unbalanced growth" or "program loans" vs. "project loans." This view has the merit to highlight such conflicts in great detail; yet it fails to take into account the reality of development economics as it was practiced in the field. This paper reassesses these old conflicts by complementing the traditional focus on theoretical debates with an emphasis on the practice of development economics.A particularly interesting example is the debate between Albert Hirschman, one of the fathers of the "unbalanced growth" approach, and Lauchlin Currie, among the advocates of "balanced growth" on how to foster iron production in Colombia in the 1950s. An analysis of the positions held by these two economists shows that they were in fact much less antithetical than is usually held and, indeed, were in some fundamental aspects surprisingly similar. Debates among development economists during the 1950s thus must be explained-at least partially-as the natural dynamics of an emerging discipline that took shape when different groups tried to achieve supremacy-or at least legitimacy-through the creation of mutually delegitimizing systemic theories.
Link to Data Set
Citation
“Alacevich, Michele. 2007. Early Development Economics Debates Revisited. Policy Research Working Paper; No. 4441. © World Bank. http://hdl.handle.net/10986/7565 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review(Washington, DC: World Bank, 2025-09-10)This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Stanley Fischer Memorial Lecture: Geopolitics and Development—The World Bank ABCDE Conference(Washington, DC: World Bank, 2025-10-01)This paper provides a sweeping historical overview of how geopolitics has shaped economic development and global institutions, culminating in a forward-looking analysis of challenges facing the world in 2025. The paper argues that understanding economic history and the political economy is essential for effective policy making, as geopolitics—encompassing power politics, geography, security, and ecology—fundamentally influences development economics. It traces the dynamic interplay between geopolitics and development across major historical periods: from the European Age of Discovery and the rise of nation-states, through the world wars and the Bretton Woods era, to the Cold War and the age of globalization. It highlights how crises and conflicts have repeatedly transformed global economic systems, spurring new ideas and institutions. Looking ahead, the paper identifies key trends for 2025—fragmented global governance amid ongoing globalization (migration, climate change, and debt), shifting security contexts with territorial disputes and nuclear risks, and the intersection of energy, climate, demographics, and migration with development—as it predicts increased economic nationalism and regionalization in finance and trade. The paper concludes by emphasizing the adaptive role of multilateral institutions like the World Bank and the International Monetary Fund, advocating for a holistic approach to development economics that integrates political and economic institutions, governance, and both macro and micro markets.Publication Gender Gaps in the Performance of Small Firms: Evidence from Urban Peru(Washington, DC: World Bank, 2025-09-23)This paper estimates the gender gap in the performance of firms in Peru using representative data on both formal and informal firms. On average, informal female-led firms have lower sales, labor productivity, and profits compared to their male-led counterparts, with differences more pronounced when controlling for observable determinants of firm performance. However, gender gaps are only significant at the bottom of the performance distribution of informal firms, and these gaps disappear at the top of the distribution of informal firms and for formal firms. Possible explanations for the performance gaps at the bottom of the distribution include the higher likelihood of small, female-led firms being home-based, which is linked to lower profits, and their concentration in less profitable sectors. The paper provides suggestive evidence that household responsibilities play a key role in explaining the gender gap in firm performance among informal firms. Therefore, policies that promote access to care services or foster a more equal distribution of household activities may reduce gender productivity gaps and allow for a more efficient allocation of resources.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Mechanics of Job Creation : Seizing the New Dividends of Globalization(World Bank, Washington, DC, 2013-10)This paper assesses some of the main strands of the theoretical literature on unemployment and employment and shows that their interesting conclusions may not be transferable to low-income countries whose endowment and production structures are profoundly different from that of high-income economies. It then tackles the knowledge deficit on employment creation by shedding light on the new economic opportunities that latecomers may derive from the dynamics of globalization -- especially the economic success of large emerging economies such as China and Brazil. It offers a simple analytical framework for identifying opportunities for labor arbitrage in the global economy and suggests a practical policy framework for exploiting them.Publication Shifting Patterns of Economic Growth and Rethinking Development(World Bank, Washington, DC, 2012-04)This paper provides an historical overview of both the evolution of the economic performance of the developing world and the evolution of economic thought on development policy. The 20th century was broadly characterized by divergence between high-income countries and the developing world, with only a limited number (less than 10 percent of the economies in the world) managing to progress out of lower or middle-income status to high-income status. The last decade witnessed a sharp reversal from a pattern of divergence to convergence --particularly for a set of large middle-income countries. The latter phenomenon was also driven by increasing economic ties among developing countries, and on the intellectual scale, increased knowledge generation and sharing among the developing countries. Re-thinking development policy implies confronting these realities: 20th century economic divergence, the experience of the handful of success stories, and the recent rise of the multi-polar growth world. The paper provides descriptive data and a literature survey to document these trends. The paper also provides a brief survey of the role of multilateral institutions -- in particular, the World Bank -- in this changing context and offers suggestions on how they can adapt their strategies to improve development outcomes.Publication Post-Macroeconomics : Reflections on the Crisis and Strategic Directions Ahead(2009-07-01)For decades, many researchers argued that economics had nothing to fear from enriching itself with lessons and advances from other disciplines. Unfortunately, these suggestions were either neglected or dismissed upfront in what was then arbitrarily considered mainstream economics. The global crisis has led even Nobel Prize winners to acknowledge that the problem facing economists and policy makers today is mostly intellectual - it is the need to confront the systematic failure of thinking, especially on the part of macroeconomists. Despite its unprecedented magnitude and heavy financial, human, and intellectual cost, the crisis certainly does not invalidate everything that has been learned about macroeconomics. However, the costs highlight some of mistakes of the dominant intellectual macroeconomic framework. Post-macroeconomics should not be understood as another metanarrative of the end of metanarratives. The use of the prefix post here suggests and emphasizes much more than temporal posterity. Post-macroeconomics should follow from macroeconomics more than it follows after macroeconomics. The theorizing of post-macroeconomics is therefore neither systematically oppositional nor hegemonic. It does not advocate a - dialectic opposition - between macroeconomics and post-macroeconomics. Rather, it suggests that the latter builds on the former and goes beyond it.Publication North-South Knowledge Sharing on Incentive-based Conditional Cash Transfer Programs(World Bank, Washington, DC, 2011-01)Over the last decade, Conditional Cash Transfer (CCT) programs have become one of the most widely adopted anti-poverty initiatives in the developing world. Inspired particularly by Mexico's successful program, CCTs are viewed as an effective way to provide basic income support while building children's human capital. These programs have had a remarkable global expansion, from a handful programs in the late 1990s to programs in close to 30 countries today, including a demonstration program in the United States. In contrast to many other safety net programs in developing countries, CCTs have been closely studied and well evaluated, creating both a strong evidence base from which to inform policy decisions and an active global community of practice. This paper first reviews the emergence of CCTs in the context of a key theme in welfare reform, notably using incentives to promote human capital development, going beyond the traditional focus on income support. The paper then examines what has been learned to date from the experience with CCTs in the South and raises a series of questions concerning the relevance and replicability of these lessons in other contexts. The paper concludes with a call for further knowledge sharing in two areas: between the North and South as the experience with welfare reform and CCTs in particular expands, and between behavioral science and welfare policy.Publication The Impact of Macroeconomic Policies on Poverty and Income Distribution : Macro-Micro Evaluation Techniques and Tools(Washington, DC : World Bank and Palgrave Macmillan, 2008-01-19)This book assembles methodologies and techniques to evaluate the poverty impact of macroeconomic policies. It takes as a departure point a companion volume, the impact of economic policies on poverty and income distribution: evaluation techniques and tools. This volume was primarily a review of microeconomic techniques aimed at assessing policies that are directly concerned with the welfare of poor households or individuals such as changing the level of cash transfers to the poorest households, increasing price subsidies for basic consumer goods, and the like. In addition, the second part of that earlier publication introduced basic techniques to deal with the poverty impact of macroeconomic policies that by definition are not targeted and affect the whole population. This volume presents a comprehensive array of macro-micro modeling frameworks. It begins by highlighting the limitation of macroeconomic models that use representative household groups to link macroeconomic policies and microeconomic data. It then moves to more complexes, top-down modeling frameworks, which combine (top) macro models and (down) micro simulation models that, in turn, can be simple micro accounting models or behavioral micro models. The book also explores integrated models, in which the macro and micro parts are either linked by iterative feedback loops or solved simultaneously as a single model. By providing clear access to these techniques, by documenting their analytical underpinnings, their data requirements, and their range of applicability, and even by highlighting some of their limitations, this book provides a unique compendium for practitioners, policy makers, and anyone interested in economic development.
Users also downloaded
Showing related downloaded files
Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication Morocco Economic Update, Winter 2025(Washington, DC: World Bank, 2025-04-03)Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.