Back | Programme Area: Special Events (2000 - 2009)
Development Economics: A Call to Action (Draft)
The primary challenge confronting development economists in the 21st century is not that of creating a new theoretical framework to understand, and respond to, the development problems and opportunities facing the world community. Rather, their challenge is to deploy their skills as applied economists, heeding the circumstances unique to each country, in order to help eradicate poverty, reduce inequities, and advance sustainable development. In other words, development economists should address the development policy agenda in the real world, in all its untidiness and diversity.
Democratization has opened up a political space in which this challenge must be met, but democracy is itself a work in progress. The frontier that development economists must explore and help to settle is that of democratizing economic policy-making. With greater inclusion and popular participation in economic policy-making, development economists will be called upon to work with their fellow-citizens, partly as experts, partly as educators and facilitators. Their tasks will include identifying the social welfare function, translating it into a series of social choices or possibilities constrained by available resources, and determining the set of fiscal, monetary, exchange-rate, trade and other policies that are both consistent and politically viable.
In other words, economic planning is on its way back, but this time it will be planning from below. Poverty Reduction Strategy Papers (PRSPs) are a manifestation of the shape of things to come. An important question is what difference PRSPs will make to policies actually adopted and to real outcomes. An increasingly globalized economy limits (and, to some extent, also enhances) the choices and possibilities open to each society. Planners must take into account the mobility of factors of production, particularly that of capital and skilled labour, in determining what policies are consistent and politically viable.
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