Fifty Years of Economic Development

Before addressing the question of lessons of development, we must make clear at the outset the sense in which the term is used. Economic development, as distinct from mere economic growth, combines: (1) self-sustaining growth; (2) structural change in patterns of production; (3) technological upgrading; (4) social, political and institutional modernization; and (5) widespread improvement in the human condition. Kuznets used “development” in the sense of the first three elements; development historians, new institutional development theorists and the neoclassical development economists of the eighties added increasing the sphere in which markets guide economic decisions (institutional modernization) to the Kuznetsian definition of development. Modernization theorists have added social and political development to the list of transformations that development entails while the deficient entrepreneurship school has added socio cultural evolution to the necessary aspects of development. Finally, the deficiencies of the concentrated growth process of the first two decades of economic growth have led those concerned with the welfare of the poor ( Mc Namara 1973, Adelman and Morris 1973; Adelman 1973, Streeten and Stewart 1976, Sen 1988 and the UNDP,1990 onwards ) to add widespread improvements in national welfare explicitly to the list of characteristics of economic development which distinguish it from economic growth. When the notion of “development “ is used in this sense, less than half a dozen countries, mostly East Asian, have traveled the whole path from underdeveloped to developed. since the end of World War Two. Others have progressed part-way. The semi-industrial countries have achieved substantial transformation of their patterns of production, gone part-way in increasing the sway of markets and the democratization of their political institutions but failed to share the benefits of growth widely. And the Sub Saharan countries have accomplished some growth in human capital and infrastructure but are still relying on primary production and its processing for whatever growth they attain, if any.