The Human Development Index a political rallying point

The item in the UNDP's Human Development Reports (1990-2005) that has caught the public's eye and caused most controversy is perhaps analytically the weakest it is the Human Development Index (more fully discussed below). It is clear that the concept of human development is much wider and richer than what can be caught in any index or set of indicators. This is true of other indicators, such as those of temperature. But, it might be asked, why try to catch a vector in a single number Yet, such...

Jaime Ros1

Some 50 years ago, a new field of economic theory emerged aiming to answer big questions in development economics, to address issues about the persistence of underdevelopment and to search for remedies to overcome poverty. The nature of these questions made it that, as Taylor and Arida (1988) put it in their survey of development thinking, the new field was 'born macro' and had to rely on a paradigm built upon notions of imperfect competition, increasing returns and labor surpluses that were...

Jos Gabriel Palma

Structuralism is basically a method of enquiry which challenges the assumptions of empiricism and positivism. This method is found in literary criticism, linguistics, aesthetics and social sciences, both Marxist and non-Marxist. The principal characteristic of structuralism is that it takes as its object of investigation a 'system', that is, the reciprocal relations among parts of a whole, rather than the study of the different parts in isolation. In a more specific sense this concept is used...

Steven N Durlauf Andros Kourtellos and Chih Ming

For much of the post-war period, empirical work on economic growth focused on accounting exercises whose goal was to understand the relative roles of factor accumulation and technical change in explaining growth trends. This approach was initiated in Solow's seminal 1957 article work by Denison 1974 represents a particularly sophisticated version of this approach. In contrast, modern growth empirics largely attempt to address issues of cross-country economic differences using regression or...

Structural change in models of growth

Most growth models of the 'old' or 'new' vintages are aggregate models and by definition ignore structure.4 Sectoral models, of the von Neumann balanced growth type, also exclude structural change by definition. Those models gave us elegant duality relations and turnpike theorems with intriguing suggestions for planning. All of them ended up being irrelevant for development while fostering social engineering interventions, seldom positive. In many of these models relative prices remain...

Jos Gabriel Palma1

Dependency theories emerged in Latin America in the early 1960s as attempts to transform Marxist and Structuralist thinking radically about both the obstacles facing capitalist development in the periphery, and whether there still was an actual need for capitalist development as a necessary transition step towards socialism. There can be little doubt that the Cuban Revolution was a turning point in Marxist analysis of capitalist development in the periphery. The events in Cuba gave rise to a...

Thinking about economic development

In Europe, since the sixteenth century, publicists, merchants and advisors to governments had been putting forward their views about how to increase the wealth of the princes and countries they were concerned with. But the locus classicus of thinking about economic development was Adam Smith's Wealth of Nations Smith, 1776 1976 . In this book, Smith put forward his view that economic development is driven by the division of labour and expanding markets in an economy which is free of unnecessary...

A regional laboratory for comparative institutional analysis

Central America offers a fascinating comparative microcosm for examining questions of institutions and growth. Five countries share a similar colonial heritage, history of commodity exports and geopolitical position.2 Yet, once cut loose from the formal control of the Spanish empire at the beginning of the nineteenth century, they have strikingly different institutional histories and levels of economic success. Robinson's analysis of Central America done jointly with Jeffrey Nugent focuses on a...

Notes

Thanks are owed to Diane Flaherty, Amitava Dutt, Jaime Ros and Elaine McCrate for very useful comments and criticisms. 2. There are many excellent general references for the application of empirical models to developing economies. See, for example, Sadoulet and de Janvry 1995 , Taylor 1979 and Blitzer et al. 1975 . 3. The application of Bayesian statistical methods to developing countries is still in its infancy. For an example, see Sala-i-Martin et al. 2004 . For Bayesian methods, see...