NEW DIRECTIONS IN DEVELOPMENT ECONOMICS: THEORY OR EMPIRICS? A Symposium in Economic and Political Weekly

It is the Policy of Cornell University actively to support equality of educational and employment opportunity. No person shall be denied admission to any educational program or activity or be denied employment on the basis of any legally prohibited discrimination committed to the maintenance of affirmative action programs which will assure the continuation of such equality of opportunity. Abhijit Banerjee " New Development Economics " and the Challenge to Theory. Abstract In May 2004 a conference was held at Cornell University entitled " 75 Years of Development Research. ". 1 Apart from the usual array of theoretical and empirical papers on development, a number of panels took stock of the state of development economics and discussed a range of methodological issues. One commentary that stood out in the challenge it posed to the current state of development economics was, " Is there Too Little Theory in Development Economics Today? " by Dilip Mookherjee. He answered his own question in the affirmative. Given the debate it generated, after the conference it was circulated to a number of leading development economists who had been present at the conference, and responses were invited. Pranab Bardhan sent in a response, " Theory or Empirics in Development Economics, " as did Kaushik Basu, " The New Empirical Development Economics: Remarks on its Philosophical Foundations. " These papers were largely supportive of the position taken by Mookherjee. There then followed a response to all three of these papers by Abhijit Banerjee, " 'New Development Economics' and the Challenge to Theory, " which mounted a defense of the current empirical methods in development economics. Ravi Kanbur then followed with his comments, " Goldilocks Development Economics. " Ravi Kanbur also took the responsibility of coordinating the contributions. These five papers are being brought together here in this symposium in Economic and Political Weekly. th anniversary of the publication of Allyn Young's classic paper on Increasing Returns, which some regard as the start of modern theorizing on development, " Increasing Returns and Economic Progress, " The Development economics is increasingly becoming an empirical discipline today. Where theory reigned during the 1980s and early 1990s, in the last ten years or so the primary research concerns have become increasingly driven by empirical and policy issues. In this essay I wish to reflect on the balance between theory and the rest in the discipline, thinking aloud about the question whether the …