IntroductionII

　　Development economics fi rst became an independent subdiscipline of

　　modern economics after World War II. Various schools of fi rst-generation

　　development economists in fact emphasized the importance of structural

　　change and saw structural differences as a result of market failures. Not

　　surprisingly, they proposed to use government interventions to facilitate

　　structural change through import substitution and gave priority to modern

　　advanced industries. It was a period when new protective devices such

　　as quantitative restrictions on imports and exchange controls to manage

　　the balance of payments were fi rst used on a large scale by most countries.

　　Using Keynesianism as the main intellectual foundation for their

　　analyses, early development economists advocated a “dirigiste dogma”

　　(Lal 1983), positing as the central tenant of their theories that developing

　　countries were irremediably different from industrial countries. Most

　　developing countries and multilateral development institutions followed

　　these policy recommendations. From Latin America to Europe, Asia, and

　　Africa, results were disappointing, and the gap with the industrialized

　　countries widened.

　　The failure of the government interventions inspired by the fi rst-wave

　　development thinking generated a new wave, which highlighted government

　　failures and adopted an astructural approach toward economic

　　development that emphasized the essential function of markets in allocating

　　resources and providing incentives for economic development, ignored

　　the structural differences among countries at different levels of development

　　in their policy recommendations, and expected the structural change

　　to happen spontaneously in a country’s development process.

　　Keynesian macroeconomics was also challenged by the emergence of

　　stagfl ation in the 1970s, the Latin American debt crisis, and the collapse

　　of the socialist planning system in the 1980s. The rational expectations

　　theory became the dominant intellectual framework for development and

　　helped refute the structuralist theoretical foundation for the state’s role in

　　using fi scal, monetary, and trade policy for economic development. The

　　new development thinking emphasized getting the price right, creating a

　　stable market environment, strengthening the institutions necessary for

　　markets to function well (property rights, good governance, business

　　environment, and the like), and building human capital (education and

　　health) to supply the increasingly skilled labor required by advances in

　　technology.

本文摘自《新結構經濟學》

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　　 Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this framework as well as concrete advice to development practitioners.