Kaldor and the Third World

As a separate sub-discipline, development economics lasted only four decades, from its origins in the 1940s until it was submerged in the neoliberal Washington Consensus forty years later (Hirschman 1981; Mitchell 2004; Tignor 2006). Kaldor was not quite in at the birth, which owed something to contemporary research in economics and (especially) economic statistics and a great deal to the broader political context of the time. Economists had always recognised the existence of a gap between rich and poor countries, but the sheer size of the gulf between ‘advanced’ and ‘backward’ areas, or ‘developed’ and ‘underdeveloped’ regions, only became apparent with the refinement of national income accounting techniques that was discussed in Chapter 3 and the massive international data collection by Simon Kuznets and others that began in the 1930s. By 1956 it was almost a commonplace to acknowledge that ‘the real income per head of the “developed” countries, making allowance for shortcomings in statistical measurement, is 10, 20 or perhaps even 30 times as large as the real income per head of Asia, Latin America or South Eastern Europe’ (Kaldor 1956b, p. 20).