In Pursuit of a New Paradigm (Presidential Address)

After 40 years of its birth, development economics has come tobe widely accepted – without universal acclaim. In sharp contrast tosome pessimistic evaluations of the subject, the academic community hasgranted it the right to a separate existence. But the recognition hasnot come easy. From the first full-length evaluation of the disciplineby Chenery (1965), in which he looks at it as a variation on theclassical theme of comparative advantage, to Stem’s (1989) sympatheticreview of the contributions that the discipline has made to the state ofeconomic knowledge, development economics has experienced many avicissitude – both the laurels of glory and the “arrows of outrageousfortune”. But, finally, it has become an industry in its own right, ofwhich not only social profitability but also ‘private’ profitabilityappears to be strictly positive: the publishing industry continues topatronize it and publish full-length books on the subject. Four decadesof development experience, the production of massive cross-country andtime-series data about a large number of development variables, theconstruction of large macro-economic models and fast-running computers,and the application of mathematical methods, have all combined to laythe foundations of a theoretically rigorous and policy-relevantdevelopment paradigm, which is gradually replacing the old one. All thisis good news for development economists, who can now afford not onlybread but also some butter for their daily parsnips .