Rethinking development economics

Abstract

The global financial crisis, too, has cast doubt over the neoclassical paradigm in advanced industrial countries, and rightly so. Much of development economics had been viewed as asking how developing countries could successfully transition toward the kinds of market-oriented policy frameworks that came to be called "American style capitalism." The debate was not about the goal, but the path to that goal, with some advocating "shock therapy," while others focused on pacing and sequencing--a more gradualist tack. The global financial crisis has now raised questions about that model even for developed countries.