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Contributions from
the Column
Books and Media
Common Ground or Mutual Exclusion?
It takes more than free elections to make a democracy
“Technology” as a key to development
Educational mission “Global learning”
3/2004 |
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[ An overview worth reading ]
“Technology” as a key to development
The publication of a textbook always requires special justification – especially if it deals with relatively well-covered subjects like “growth” and “development”. Ros has a convincing argument for his book: it breaks new ground in attempting to integrate earlier approaches to development theory with recent thoughts on growth theory. Both lines of theory focus on market imperfections such as incomplete competition, rising returns to scale and systemic unemployment and thus conflict with the traditional neoclassical approach, which generally regards market results as efficient.
Readers with a basic knowledge in economics and fundamentals in maths will appreciate the fact that Ros also takes at least notional account of the empirical relevance of the different theoretical approaches he addresses. However, his empirically driven criticism of the traditional neoclassical growth model cannot be entirely convincing because it is based on a very restrictive interpretation of the factor “technology”. In other words: empirical assessment of alternative theoretical approaches depends on what one actually understands by “technology”.
If “technology” is taken to be just a kind of blueprint for helping to transform the aggregated factors of production “labour” and “capital” into a country's national product, it is hard to understand why certain countries should not have access to such a blueprint: even an extremely poor country like North Korea apparently has the blueprint for making nuclear bombs. If “technology” is also taken to mean the quality of the institutional environment in a country, it immediately becomes apparent why there are no massive flows of capital to the poorest countries. “Technology” can equally be interpreted, however, as including the climatic and geographical conditions of a country – conditions which might constitute a serious obstacle to development.
Recent empirical studies show that in cases where “technology” is not interpreted in an excessively narrow sense, the neoclassical growth model provides absolutely useful hypotheses for explaining international differences in income. Regardless of his empirical appraisal of alternative development theories, Ros provides an overview of current theoretical research which is well worth reading – one which could help nudge the issue of “development” back from the periphery to the hub of the economic debate. Erich Gundlach
Jaime Ros: Development Theory and the Economics of Growth.
Ann Arbor, University of Michigan Press 2001, 429 pp., US-Dollar 29.95,
ISBN 0-472-08847-5
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