Proximate, Intermediate and Ultimate Causality: Theories and Experiences of Growth and Development

For a better understanding of development, we are interested in why in the long run some countries or societies forge ahead, while others stagnate or fall behind. We are especially interested in the conditions under which growth and catchup can be realised in developing countries. In section 1 of this paper, we develop a framework of proximate, intermediate and ultimate sources of growth and development which serves to structure the analysis and measurement of economic development. Sections 2 to 6 offer a review of classical and modern theories of development and stagnation, in the context of the framework of proximate and ultimate causality developed in section 1. Special attention is paid to the interactions between institutions and growth in different theoretical traditions. Section 7 presents empirical time series on long-run economic trends in a sample of 31 developing countries representing 80 percent of the population of the developing world. These series focus on proximate causality and on socio-economic outcomes and highlight some of the key issues discussed in the theoretical overview in sections 2-6.