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Theories of Development

How development is supposed to work.
12 answers, drawn as causal chains.

Development policy runs on theories about why some places are poor, and most of them are argued about without anybody drawing what they actually claim. Each entry here is one theory turned into a diagram you can step through, placed on four axes with the reason for each placement, and then set against the record: what it predicted, what happened, and what is still open.

Global canon and South Asian traditions in one catalogue, so that Rostow and Nehru, or Ambedkar and Gandhi, can be read side by side rather than in separate literatures.

The catalogue

Filter it

Tradition
Topic
When

1909–1948 Indian nationalist

Village swaraj and the economy of permanence

M. K. Gandhi, J. C. Kumarappa

An economy should be organised around the village as a largely self-sufficient unit producing for local need with local labour, because centralised industrial production concentrates power, displaces the labour of a country that has labour to spare, and cannot be sustained by everyone.

AgricultureEnvironmentState capacityIndustry
1916–1956 Anti-caste

Annihilation of caste and state socialism

B. R. Ambedkar

Caste is a division of labourers rather than of labour, held in place by endogamy and by religious sanction, and no economic programme that leaves it standing will reach the people at the bottom of it.

CasteState capacityAgricultureIndustry
1950–1970s Dependency and world-systems

Dependency and unequal exchange

Raúl Prebisch, Hans Singer, Andre Gunder Frank, Samir Amin

Poor countries are not behind rich ones on the same road; they are poor because of the way they are joined to rich ones, and the terms of that connection get worse over time.

TradeGrowthIndustry
1954 Classical and structuralist

Development with unlimited supplies of labour

W. Arthur Lewis

A poor country holds a reserve of labour whose withdrawal from farming costs almost no output, so a modern sector can expand for decades at a flat wage, and everything the expansion earns above that wage is available to reinvest.

GrowthIndustryAgriculture
1953–1961 Socialist and planning

Planning for the capital goods sector

P. C. Mahalanobis, Jawaharlal Nehru

In an economy that cannot count on importing machines, the long-run growth rate is set by how much of today's investment goes into making machines rather than consumer goods, so the plan should hold consumption down and build heavy industry first.

IndustryGrowthState capacity
1960 Modernisation

The stages of economic growth

W. W. Rostow

Every society passes through the same five stages on the way to a modern economy, and the one that matters is a short take-off in which investment roughly doubles as a share of national income.

GrowthIndustry
1973–present Ecological

The environmentalism of the poor

Chandi Prasad Bhatt, Sunderlal Bahuguna, Gaura Devi, Ramachandra Guha, Vandana Shiva

Environmental conflict in a poor country is a distributional fight over who may use a resource that people live on, not a contest between growth and nature, and the people defending the resource are usually its poorest users.

EnvironmentAgricultureGenderInstitutions
1979–present Human development and capabilities

Capabilities and human development

Amartya Sen, Mahbub ul Haq, Martha Nussbaum

Development should be measured by what people are actually able to do and to be, because income and even goods say nothing about what a particular person can convert them into.

PovertyGenderMethodState capacity
1984 Political economy of India

The dominant proprietary classes

Pranab Bardhan

India's industrial stagnation was not a planning error but the predictable output of a state serving three propertied groups, none strong enough to rule and all strong enough to be paid off, so public money went into subsidies rather than investment.

State capacityIndustryAgricultureInstitutions
1980–2000 Neoclassical and market reform

Stabilise, liberalise, privatise

John Williamson

Poor countries are poor because prices are distorted by their own governments, so the sequence is to close the fiscal gap, let prices find their level, open to trade and investment, and get the state out of production.

GrowthTradeInstitutionsState capacity
1990–present Institutionalist

Institutions as the fundamental cause

Douglass North, Daron Acemoglu, Simon Johnson, James Robinson

Differences in income between countries are caused by differences in the rules governing property, entry and power, and those rules were largely set long ago by whether a place was settled or extracted from.

InstitutionsGrowthState capacity
1997–present Experimentalist

Randomised evaluation and the small-question turn

Esther Duflo, Abhijit Banerjee, Michael Kremer

Grand theories of development cannot be tested, but specific questions about specific programmes can be, by assigning them at random and comparing, and enough answered small questions is a better guide to policy than any answered large one.

MethodPovertyState capacity
How the placements work

Four axes, chosen for this material

Catalogues of political thought usually sort on a left-to-right axis. That axis sorts Indian thought badly: it puts Ambedkar and Nehru far apart while they share most of their economics, and it has nowhere to put Gandhi at all. These four ask questions that the theories on this shelf actually disagree about.

Who allocates The state decides Markets decide

When resources have to be directed somewhere, does the theory trust planners or prices to do it?

What comes first Redistribute first Grow first

Does the theory hold that the pie must be enlarged before it can be shared, or that the sharing is the point and cannot wait?

Where hierarchy sits Hierarchy is its own cause Hierarchy follows from economics

Does the theory treat caste, gender and race as forces that generate outcomes on their own, or as effects that dissolve once the economics is fixed? This axis replaces the left-right axis such catalogues usually carry, which sorts Indian thought badly: Ambedkar and Lohia sit far from Nehru on it while sharing much of his economics.

Who moves Movements and the poor Experts and the state

Who does the theory cast as the agent of change: organised people, or planners, economists and administrators?

The placements are ours, so argue with them

The four scores are editorial. They run from -3 to +3, they were assigned by the ImpactMojo editorial team from the theory's own texts, and each theory page shows the sentence that justifies its placement so the placement can be argued with. They are a way of arranging a shelf, not a measurement.

Using this

In a classroom or a workshop

Give a group two theories that contrast, one from the global canon and one from South Asia, and have them find the sentence in each that the other would refuse. The disagreement is usually not about facts and usually not about values either; it is about which mechanism is doing the work, which is what the diagrams are for.

The evidence section on each page is deliberately unkind to the theory it belongs to, including the ones we find persuasive. If you reproduce a diagram or the evidence, credit ImpactMojo. If you reproduce a theory, credit the person who thought of it, which each page names.