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Reflections on the Restoration of Development Economics (Draft)
The restoration of development economics is not solely an intellectual task. If this were the case, the world’s policy makers and their academic advisers would have acknowledged long ago the failure of neo-liberal policies to deliver on the acceleration of global growth promised by neo-liberal theory. And the animal spirits of careerist economists would have motivated a rush to new intellectual ground.
Instead, the economics profession’s reaction to the accumulating evidence of failure has been, at best, to concede that progress along the neo-liberal path takes a little more time – and that there will, of course, be some casualties. (“Didn’t we mention it? Sorry about that!”) We are assured that there is no need for policies to promote social equity or democracy. Those will come as a by-product of more rapid sustained economic growth, which, if we are patient, will arrive in due course. Any renewed interest in the public sector and civil society institutions is limited to assigning them to the task of caring for the “losers” whom the deregulated market has left behind.
This reaction reminds us that the triumph of neo-liberalism in academic as well as policy circles was not entirely an intellectual exercise either. Its rise to hegemony is a part of a wider conservative political agenda.
All economic theories, like all economic systems, come with a politics. Indeed, political science itself has been defined as the practice of “who gets what.” Neo-liberal economic thought is, as most of us know, connected to the multinational political and financial forces that currently dominate the post-Cold War global economy. This does not mean that all neo-liberal scholarship is politically motivated. It simply means that the rich and powerful typically support the scholarship that reinforces their view of the way the world should work. It would be odd if it were otherwise.
Over the years, these multinational interests have created a global “echo chamber” through which ideas that support their agenda resonate among the policy-making institutions, the media, universities, think tanks, and the larger literate public. They particularly targeted journalists and the media, who represent “gatekeepers” to the global policy debate.
The effect of this echo chamber on the policy debate is to drown out dissent based on empirical research with second-rate research and analysis rationalizing de-regulation, short-term investment horizons, and the increased commodification of human values.
An examination of the economic motivations and behavior of those institutions (and their clients) that determine development policy needs to be part of any serious effort to resuscitate development economics. As Amartya Sen recently observed. “The whole power structure underlying the institutional architecture itself needs to be reassessed in the light of the new political reality.”
Another implication is that the arguments for a new development paradigm must be consciously organized. By itself, quality does not necessarily prevail in the marketplace for ideas.
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