distribution of income.‖ There was already the empirical observation that industrialization was at the core of progress in advanced economies; however, structuralists believed that structural rigidities in developing countries would prevent this process of industrialization, and ―selfsustained‖ growth could not become a reality without more interventionist government policies.

**Table 6: Brief Chronology of Development Economics Thinking**<sup>**2425**</sup>

|**Years**|**Main ideas /Key words**|**Representatives**<br>**/masterpiece**|
|---|---|---|
|1776-|_The Wealth of Nations_<br>Invisible hand,market liberalism.|Adam Smith (1723-1790)|
|1848-|Problems of Political Economy, Liberty of individual action in economic<br>and political spheres, concept of ―utilitarianism‖, economic growth as a<br>function of factor accumulation.|John Stuart Mill (1848)|
|1940s-1960s|Theory of ―the Big push‖, balanced growth, planning, investment<br>programming, strong role of the government for industrialization; and<br>international aid theory. (This was driven by newly independent<br>developing countries. The UN pointed to the goal of colonial<br>emancipation.)<br>―Structuralist‖ approach, Stages of development –the takeoff; the two-<br>gap model, emphasizing savings and investment, sectoral<br>disaggregation; international aid policy stressed country leadership<br>Unbalanced growth, ―favouring industries with strong backward and<br>forward linkages‖, suspicious of planning, sequential growth, ―we<br>cannot achieve all objectives at once‖ ―Convert import to import<br>substitutes‖.<br>Dependency argument, ―Capitalism and underdevelopment in Latin<br>America‖, the center-periphery concept, ―the decline in terms of trade<br>against the export of primary commodities was secular and led to the<br>transfer of income from resource-intensive developing countries to<br>capital-intensive developed countries‖ ―the way ... was to develop<br>domestic manufacturing industries through a process known as import<br>substitution‖ (Lin 2011).|Paul N. Rosenstein-Rodan,<br>who headed the World<br>Bank research department<br>in 1947<br>Arthur Lewis (1954),<br>Chang (1949), Myrdal<br>(1957), Walt W. Rostow<br>(1960), Simon Kuznets<br>(1930, 1966), Hollis<br>Chenery (1970)<br>Albert O. Hirschman<br>(1958)<br>Frank (1967), Cardoso and<br>Faletto (1967), Prébisch<br>(1950), Singer (1950),<br>Samir (1976)|
|1970s|The shift from physical capital to human capital, from capital intensive<br>to appropriate less cap-intensive technologies, from employment in large<br>cities to SMEs,|Jan Tinbergen (1958, 64),<br>Gary Becker (1964), T. W.<br>Schultz(1968,1971).|
|1980s|End of the heyday of development economics, and a shift to market<br>liberalism, structural adjustment, reaction to failures of structuralism,<br>new focus on removal of government distortions, leading towards<br>Washington Consensus. Also,revival of institutional economics.|Krueger (1974)<br>North(1981,1990)|
|1990s|Endogenous growth theory develops deeper understanding of role of<br>technology, however, there is inadequate attention to catch-up theory –<br>differences in innovation for developing countries.|Romer (1990), Aghion and<br>Howitt (1992), Aghion and<br>Tirole (1994), Jones<br>(1995),Açemoglu(2003)|
|2000s-<br>Present|Multiple approaches:<br>Reaction to failures of Washington Consensus<br>randomized experiments, enterprise surveys and investment climate<br>analysis, firm level econometrics and productivity,<br>Revival of interest in structural transformation;<br>Growth diagnostics,<br>New Structural Economics|Hausmann, Rodrik and<br>Velasco (2005), Banerjee<br>and Duflo (2011), Lin<br>(2012c)|

Source: Compiled based on _Pioneers in Development_ , a World Bank publication, 1984, and Lin (2011c).

> 24 The intention here is not to give a full review of development thinking.  For a fuller review, see Lin (2011c). 25 The authors thank Yan Wang of the World Bank for the compilation of a preliminary draft of this table.

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