Econ 198

The Nature of Development Economics

LESS DEVELOPED COUNTRIES

* Most commodity and resource markets are highly imperfect

* Consumers and producers have limited information

* Major structural changes in both the economy and society are taking place

* The potential for multiple equilibrium rather than a single equilibrium is common

* Disequilibrium situations often prevail (prices do not equate supply and demand)

* Economic calculations are dominated by political and social priorities

* Because of the heterogeneity of the developing world and the complexity of the development process, development economics must be eclectic.

* The ultimate purpose of development economics remains constant: to help us better understand developing economies in order to help them improve the material lives of three-quarters of the global population.

The important role of values in development economics

* Unlike the physical sciences, the social science of economics can claim neither scientific laws nor universal truths.

* In economics, there can only be tendencies, and even these are subject to great variations in different countries and cultures and at different times

* Many general economic models are in fact based on a set of assumptions about human behavior and economic relationships that may have little or no connection with the realities of developing economies.

* Does the theory of consumer behavior apply to missionaries like the late Mother Theresa?

* It is necessary to recognize from the outset that ethical or normative value premises about what is or is not desirable are central features of development economics.

* The mere identification of topics or problems such as poverty, inequality, unemployment, population growth, rural stagnation, and environmental decay, conveys the value judgment that their improvement is desirable and therefore good.

* Value premises, however carefully disguised, are inherent component of...