The Relevance of Ragnar Nurkse and Classical Development Economics
AbstractIn this essay we aim to show, first, how the classical development economics, that of Ragnar Nurkse's (1907-1957) generation, epitomized the best development practices of the past 500 years and crafted them into what Krugman rightly calls high development theory. It is not a coincidence that the post-World-War-II era, when Nurkse and others ruled the development mainstream, is one of exceptionally good performance for many poor countries. Second, we argue that the alleged death of the classical development economics and subsequent rise of the Washington Consensus has to do not so much with increasing modeling in economics, a way of research purposely discarded by many classical development thinkers, but much more with misunderstanding the reasons for East Asia's success and Latin America's demise; we show that the root cause of this misunderstanding - that goes in fact back to 'misreading' key passages in Adam Smith - is the role of technology, or of increasing returns activities, and of finance, in development. Third, we aim to indicate key areas of further research that the current development mainstream should pursue in order to re-learn how to create middle-income economies and middle-class jobs.
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Bibliographic InfoPaper provided by TUT Ragnar Nurkse School of Innovation and Governance in its series The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics with number 21.
Length: 32 pages
Date of creation: Mar 2009
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-28 (All new papers)
- NEP-HIS-2009-07-28 (Business, Economic & Financial History)
- NEP-HPE-2009-07-28 (History & Philosophy of Economics)
- NEP-PKE-2009-07-28 (Post Keynesian Economics)
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- Aldo Caliari, 2012. "Why do Shared Societies make economic sense? Three theoretical approximations," Working Papers 2012/28, Maastricht School of Management.
- Erkki Karo & Rainer Kattel, 2009. "The Copying Paradox: Why Converging Policies but Diverging Capacities for Development in Eastern European Innovation Systems?," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 24, TUT Ragnar Nurkse School of Innovation and Governance.
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