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Loews Philadelphia, Washington A
Association for Evolutionary Economics
Saturday, Jan. 6, 2018 12:30 PM - 2:15 PM
- Chair: Iciar Dominguez Lacasa, University of Bremen
The Institutional Approach to Economic Development: A Thirty-year Assessment
AbstractEconomic development is an important subject in Original Institutional Economics and is discussed in the writings of pioneering institutionalists, such as Thorstein Veblen and John Commons. During the first half of 20th century, we can perceive two main strands of original institutionalism literature on economic development. On one hand, were the studies by the social reformers, such as Walton Hamilton, and on the other hand, were those of the emerging Cactus Branch, led by the young Clarence Ayres. After World War II, institutionalists organized themselves around the Association for Evolutionary Economics and the Journal of Economic Issues (JEI) became the primary publication vehicle of institutionalism. Economic development remained an ongoing concern of institutional research in the JEI’s pages. The 1987 volumes of JEI leave no doubt about the relevance of economic development, as James Street’s The Institutionalist Theory of Economic Development is a masterpiece of institutionalist research on the subject. Thirty years have passed since Street’s seminal study. This occasion is an invitation to review what the institutionalist approach to economic development means today. Consequentially, the goal of this study is a comprehensive historical survey of JEI on economic development. To achieve this, this study goes through the past 30 years of JEI—since Street’s paper. Attempting to highlight what economic development means to institutionalists today, this study compares recent assessments with those of the past and indicates how current institutional research on economic development can be enhanced.
Examining Development Processes Through Non-marginalist Lenses: When Some Things Lead to Others In Circular and Cumulative Sequences
AbstractHow might someone not equipped with, or otherwise do not put on, Marginalist lenses look at development processes as they unfold in history? This paper argues that through non-Marginalist lenses, indivisibility regains attention, the historical sequence of events reflects path dependence, and they feedback on each other to generate circular and cumulative causative processes. One thing leads to another, or more often, some things lead to some others, and so on. Prior to the emergence of Marginalism observations with such features abound in, among others, the works of ‘protectionists’ like Alexander Hamilton, Friedrich List, Henry Carey, and others. In the post-WWII era this was most strongly represented in the works of the development economist, Albert Hirschman: in his formulation of backward and forward production linkages in the late 1950s, followed by his extension to consumption, fiscal, and banking linkages by the late 1970s. Equally important was that beginning from the 1960s he incorporated more interdisciplinary elements to relate his development studies to political processes and the institutional context of the societies or communities concerned. The different kinds of linkages could thus be blocked or unleashed, and if unleashed, could unfold in manifold ways across countries as they are shaped by varieties of sociopolitical and institutional contexts, where the blockages or unfolding in turn feedback on and possibly alter those contexts. While not regarded as an institutionalist, the resulting messages find semblance with some works of Gunnar Myrdal on circular and cumulative causation. This approach could be one that challenges Marginalism.
Institutions, Structures and Policy Paradigms: Toward Understanding Inequality in Africa
AbstractIncome inequality has been deteriorating in a number of African countries in recent years. Overall, both the gini coefficient and the ratio of the income of the highest to lowest 20% are far worse than comparable developing countries in other parts of the world. The paper will investigate the impact of shifting policy paradigms and how this has altered the institutions and economic and social structures that have generated this pattern of inequality. African countries have gone through a three decade plus policy experiment with neoliberalism which took on a meta-development status where the terms of discussion were set within the parameters of this policy paradigm. Neoliberalism transitioned from one of many possible policy approaches to a single approach to development and transitioned to the normative from the normalizing. This has created a perverse form of integration with global capitalism which has generated structural conditions that underlie the high levels of inequality. Neoliberalism was institutionalized through the conduct¸ habits, repertoire of development policy practice and through the demobilization of alternative economic thought in the economics departments in many of the universities on the continent. More recent attempts to broaden the policy domain to address the structural weaknesses of African economies are delimited by their continued grounding in mainstream neoclassical economic theory which now dominates economic theory on the continent. In contrast, the paper argues that institutional economic theory can provide insights into new policy paradigms that can shift the continent toward development with greater equality.
Regulation and Institutions: Industrial Development in Sub-Saharan Africa
AbstractIndustrial development in Sub-Saharan Africa is perhaps more affected by how governments regulate the economy than industrial development in many other economies. We build on Trebing’s (1987) Institutionalist framework of how government regulation helps shape the (formal) institutions that affect industrial development. In Sub-Saharan Africa, as elsewhere, domestic firms as well as foreign firms contribute to economic development. In this paper we focus on industries in which Public Private Partnerships (PPPs) are used as a vehicle by governments in the Sub-Saharan Africa region to additionally stimulate industrial development by enticing foreign firms into a country. Government backed institutions can offer a way to deal with the complexity and uncertainty associated with the rise in global economic interconnectedness especially in a region where societies aim to transition towards more market oriented economies. The complexities and uncertainties faced, in combination with some noted institutional weaknesses, can have significant implications when stimulating industrial development stemming from domestic and foreign firms alike. Institutionalist principles can provide policy recommendations for the complex interplay of factors that beset policy makers in sub-Saharan Africa.
- O0 - General
- B5 - Current Heterodox Approaches