Economic Development and Development Economics (Presidential Address) (Essay‪)‬

To state that development economics is about economic development is now considered beyond debate. But opinions differ about what constitutes economic development and its proper index; in particular whether the growth of per capita income adequately captures its flavour. Thus, instead of being regarded, a la Lewis, as just a synonym for capital accumulation going above a certain critical level, development economics is now also required to respond to such challenges as raising the quality of life that people succeed in achieving by living longer, by being more literate in addition to being more prosperous; and, environmentally speaking, by making the development process sustainable. Indeed, our discipline is being asked to encompass an ever wider set of problems and venture into domains where it has not entered before: namely, the choices that people make; the economic and political freedoms they enjoy; the heavy incidence of poverty among the least privileged in the society, including the rural poor;, the unjust social and economic structures that must be changed; the regulatory framework that needs to be evolved to enable the market to work--hopefully in the interest of the society. What complicates matters even more is that to be able to address many of these issues, development economics must transcend the self-imposed boundaries of strict positivism and acquire an overarching ethical vision. If mainstream economics is (rightly) regarded as a difficult science, development economics is even more so. As always, such a broadening of the scope of the discipline has come about mostly in response to the happenings in the real world; and, to a much lesser extent, as a result of the events endogenous to the economic science that we review in this address. For instance, on the basis of a set of limited observations about the real world, it has been asserted that a relief in the intensity of poverty among the very poor and an improvement in the quality of life of the people in general are not necessarily associated with the gains in the per capita GNP. Thus, a whole-time concern for human development has been recommended by some as the proper domain of development economics; while others, in violation of the Law of Gravity, prescribe the 'trickle-up" of rural development rather than the 'trickle-down' effects of the growth rate of the GDP as the proper course for economic development. What differentiates these formulations from the standard ones is that they downgrade the per capita GNP itself as a reliable means to achieve the agreed ends of economic development--namely, raising the level of economic well-being of the people.