CONCEPT – DEVELOPMENT ECONOMICS

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 CONCEPT – DEVELOPMENT ECONOMICS

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• What it is : Development economics is a branch of economics dealing with economic aspects of the development process in low income countries. 
• Focus areas : Its focus is on methods of promoting economic development, economic growth and structural change and also on improving the potential for the mass of the population. The areas involved are health, education and workplace conditions. Both public and private channels are studied.
• Different from conventional : Unlike other fields of economics, development economics does not have any consensus on what students should know. Development economics studies the transformation of emerging nations into more prosperous nations. Strategies for transforming a developing economy tend to be unique because the social and political backgrounds of countries can vary dramatically.
• Earlier theories : The earliest Western theory of development economics was "mercantilism", developed in the 17th century, paralleling the rise of the nation state. It gave little attention to 'development'. The theory promoted augmenting state power by lowering exposure to rival national powers. As an example, 'scholasticism' emphasized reconciliation with Christian theology and ethics, rather than development. 
• Economic nationalism : It refers to policies focussing on domestic control of capital formation, the economy, and labour using tariffs or other barriers. An example is the methods followed by President Donald Trump of US, while running the trade war. Such thinkers do not favour globalisation.
• Growth indicator controversy : The Per capita Gross Domestic Product (GDP per head) is used by many developmental economists as an approximation of general national well-being. But in countries where a lot of economic activity takes place out of measured financial transactions (such as housekeeping and self-homebuilding), etc.
• Famous developmental economists : Some names are 

1. Mahbub ul Haq, Pakistani economist, creator of the Human Development Report
2. Muhammad Yunus, Nobel Prize winner and founder of the Grameen Bank
3. Joseph Stiglitz, Nobel Prize winner and former chief economist at the World Bank
4. Amartya Sen, Indian economist, Nobel Prize winner, author of Development as Freedom
5. Jayati Ghosh, Professor of Economics, JNU
6. Kaushik Basu, professor of economics, Cornell University US
7. Abhijit Banerjee, professor of economics at MIT, Director of Abdul Latif Jameel Poverty Action Lab, co-recipient of the 2019 Nobel Memorial Prize in Economic Sciences
8. Esther Duflo, Director of Abdul Latif Jameel Poverty Action Lab, professor of Economics at the MIT, advocate for field experiment, co- recipient of the 2019 Nobel Memorial Prize in Economic Sciences

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