Loading...
An agenda for the new development economics
Stiglitz, Joseph E.
Stiglitz, Joseph E.
Author(s)
Author(s) (Additional)
Illustrator(s)
Producer(s)
Contributor(s)
Contributor(s) (Other)
Editor(s)
Advisor(s)
Contact(s)
Data Collector(s)
Keywords
Collections
Files
Loading...
stiglitz.pdf
Adobe PDF, 197.06 KB
Research Projects
Organizational Units
Journal Issue
Online Access
Abstract
"The seeming disappearance of development economics as a separate discipline some quarter century ago could not have come at a more inopportune time. Some of the criticisms made by mainstream economists of development economics as it was often practiced at the time are valid: for instance, it underestimated the role of markets and rationality. But their argument that developing countries are just like more developed countries, only lacking as much physical (and later, it was emphasized, human) capital and their assumption that competitive equilibrium theorem can be applied in a straightforward way is, if anything, even more misguided. In the last two decades, there has been a growing awareness of the limitations of the competitive paradigm, with its assumptions of perfect information, perfect competition, and complete markets, and with the correlate propositions that distribution and institutions do not matter. Much of the theoretical and empirical work in developed countries has focused, for instance, on agency theory (how information imperfections affect firm behavior and labor markets), the new industrial organization (how imperfections of competition affect corporate behavior), finance (viewed as centering on the information problems associated with allocating capital and monitoring its usage), and R & D. Yet, in this same period, the reigning paradigm in development economics was the Washington consensus, which ignored these considerations, despite the fact that they are even more important to developing countries. Empirical work looking at a variety of characteristics of developing countries (including not just growth rates, but volatility of growth, wage and price flexibility, etc) shows that they are markedly different from the more advanced countries and from each other."(pg 2)
Note(s)
Topic
Type
Preprint
Date
2001-09-07
Identifier
ISBN
DOI
Copyright/License
With permission of the license/copyright holder