What Can We Learn from Alternative Theories of Economic Development?


As people across the world are struggling to understand the rise of Trumpism, anti-establishment and anti-free trade movements, Erik Reinert (Tallinn University of Technology), Jayati Ghosh (Jawaharlal Nehru University) and Rainer Kattel (Tallinn University of Technology) have put together an impressive Handbook of Alternative Theories of Economic Development that can help make sense of what’s going on. As the field of Economics has become increasingly narrow since the 1970s, many important scholars and theories have been excluded from the field, and since forgotten. This Handbook presents rich historical accounts and ideas that can help explain economic and social development, and is a much needed attempt to correct for the existing biases in the field of Economics.

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Philanthropy in Development: Undermining Democracy?

The word philanthropy dates back to the Greek word φιλανθρωπία, which means the love of humanity. Today the OECD defines private philanthropy as non-official development assistance (ODA) to developing countries. Such assistance can be through large philanthropic foundations such as the Rockefeller or Clinton Foundation, or through ‘direct giving’ platforms such as Global Giving or Kiva. But does what we call philanthropy today deserve its name? Rather than focusing on the actions of specific philanthropic organizations, this piece will assess the impact the rise of philanthropy has on global governance and democracy.

Figure 1: Grants by private agencies and NGOs

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Source: OECD data

As Figure 1 illustrates, there has been a drastic increase in private funding for development over the past four decades, with the growth really picking up in the 2000s. However, these numbers from the OECD are incomplete in many ways, as much philanthropic funding is not reported as such. The Center for Global Prosperity has done more in-depth data collection on philanthropic funding for global development projects, and found that while OECD estimated private grants to be at $31.5 billion in 2011, CGP estimates the amount to be $58.9 billion. In the same year, OECD ODA was approximately $134 billion. Thus, according to the CGP estimates, philanthropy is now equivalent to 44% of ODA.

What is the effect of this rise? While some see philanthrocapitalism as a way for the rich to save the world, others criticize it for being a way for corporations and rich individuals to divert attention from the unequal outcomes that the current global economic system generates. Before assessing the effects of philanthropy on global democracy and development discourse, let me briefly touch on some of the main issues philanthropic foundations deal with in practice.

Read more at Developing Economics.

Distributing the Costs of Climate Change

In an event sponsored by the Schwartz Center for Economic Policy Analysis (SCEPA) and the student group oikos, Professor Randall S. Abate of Florida A&M University College of Law lectured and led a discussion on the issue of climate refugees.  

As broadening swaths of earth are rendered uninhabitable by— let’s not mince words— capitalism, villages currently, subsequently nations, will be forced to seek relocation.  Climate refugees—those who are forced to emigrate as the land they’ve lived on is transformed to either desert or ocean—must appeal for clemency from the very countries that have disproportionately contributed to their problem.  In the midst of these slow-burning kinds of genocides are numerous legal imbroglios, petty feuds, impolitic discourses, and opportunities for redistribution from poor to rich.

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Why Isn’t The World Bank’s Choice of Chief Economist More Controversial?

This week it became clear that the World Bank has chosen Paul Romer as its next Chief Economist. As Chief Economist he’ll have the overall responsibility of the Bank’s research program and be able to shape the developments of the highly influential development institution. Commentators have named the choice of Chief Economist impressive, great, huge news, bold, and forward-thinking. The choice of World Bank Chief Economist rarely garners this much attention – so, why the fuss?

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Transcript: Comments on The Future of Capitalism

I will start this talk by explaining where I come from. My background is from Norway, a tiny country in the outskirts of Europe, where the struggle to stay outside of the EU has been fought from the left.

We fought against what we saw as a neoliberal project that would move our democracy to Brussels. With a coalition of farmers, unions and the political left — and against the will of the political elites and the main media — the Norwegian people said ‘no’ to the EU in two referendums, in 1972 and 1994.

So, in many ways, I was looking at the unfolding of the Greek crises from the outside.

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Is Development Possible In Capitalism?

Last Friday was the Debating Development conference, organized by the titular scholars of INET’s Young Scholars Initiative, a group coordinated by NSSR’s own Ingrid Kvangraven. The conference put many scholars of different regions and different theoretical perspectives in conversation. Although it was titled “debating development,” as NSSR economics professor Sanjay Reddy noted in his opening remarks, most of the perspectives presented were more intersecting than mutually exclusive, so the conference could also be understood as a means to compound or complexify perspectives, rather than adopt or discard them.

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Coffee vs. Capital

On April 14th, Oikos NYC launched its first out of three lunch talks scheduled for the spring semester 2016 at The New School. In line with its mission, to enhance student’s engagement with sustainability in economics, the speaker, Christopher London who is Assistant Professor of International Affairs at Milano, discussed the issue of environmental sustainability of food production.

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There’s No Migration Problem Amnesty Can’t Solve

On Wednesday, Branko Milanovic whose work deals mostly with quantifying global inequality wrote a piece about migration for the Financial Times. The piece, titled “There Is a Trade-Off Between Citizenship and Migration” bespeaks the many ways in which economists seek to improve world systems by adjusting its parameters rather than calling into question the structures which underlie them.

As the title suggests, Milanovic insists that there is a trade-off between the types of citizenship countries grant immigrants and the levels of migration those countries will see. Rather than treating such migration as a result of political and economic calamities that are disproportionately laid upon the global South by the forces of Western economic and military rapaciousness, he treats it almost as an economist might treat pollution – something generally socially undesirable, but only preventable in degree by manipulating property rights.

Taking for granted a trade-off between citizenship rights and migration, Milanovic proposes a system of graduated citizenship akin to the systems of the United States and the Arab Peninsula. Needless to say, Milanovic’s approach has already seen some push-back. Chris Bertram, writing for the blog Crooked Timber has already called Milanovic’s suggestion “reinventing apartheid.” And while it might be a tad bombastic to equate the visa system of the US or the sponsorship system of the GCC with the brutally repressive white nationalist regime of South African apartheid, Bertram does have a point that such systems create arbitrary legal gateways for brutal racial repression and a sort of ethnic caste system.

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Global Development Goals: If at All, Why, When and How?

Last week, the “Sustainable Development Goals” (SDGs) were launched at the UN in New York. This is the outcome of two years of consultations, lobbying, and debate about what the “post-2015” agenda should look like. The assumption has been that the Millennium Development Goals (MDGs) were a huge success and that we, therefore, must proceed with a new round. Unfortunately, this assumption is not backed by empirical evidence.

While the SDG debates have been raging, New School Professor Sanjay Reddy and I have been asking ourselves why goals should be adopted at all. What function, if any, might they serve, and under what conditions could they do so successfully? Quite striking is the fact that  systematic efforts to answer these seemingly elementary questions have been absent.
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How to Justify Teaching the Worst of Economics to Non-Economists

miracle-at-blackboardBeing an Economics PhD student in a heterodox department gives me the privilege of taking courses in a range of different schools of thought within the discipline. In the Economics department, most of us take the stance that it is imperative to understand the mainstream in order to criticize them effectively. We go to great lengths to learn about the nuances of Neo-classical Economics, general equilibrium theory, and New-Keynesian Economics. Meanwhile, we also have full courses devoted to non-mainstream approaches, such as Post-Keynesian and Marxian Economics. We are aware of the ideological underpinnings of a lot of mainstream theory, and many of us see this as a motivation to challenge the discipline.

Now, the difficulty arises when we are to teach one introductory course in ‘Economics’ to non-economists and we know that this is likely to shape their outlook on Economics as a discipline. How much time do you then devote to mainstream models, the criticism of mainstream models, and alternative models?  Continue reading “How to Justify Teaching the Worst of Economics to Non-Economists”