Policy Relevance of Development Economics Revisited

The state of development economics has recently been the subject of a great deal of discussion. This debate has been initiated by Albert Hirschman’s illuminating paper which traced the extraordinarily productive tensions surrounding the birth of a new subdiscipline of economics, called “development economics†, up to several factors leading to its inevitable decline. Since the decline could not “be fully reversed†, the end result had to be the demise of a separate branch of economics. This was welcomed by an ideological stream of the time, the anti-Keynesian counter-revolution, as “conducive to the health of both the economics and the economies of developing countries†, because the subject was wrong and dogmatic and a hindrance rather than a help to our understanding of the development problems, let alone policymaking for economic development…