Economic development

The book is structured as a survey of the standard subject matter in the field of economic development but with some departures from the traditional sequence of most texts. I believe that the measurement of development (including national product and income, income distribution, and indicators of the "quality of life") should come early in the analysis, so this material appears in Chapter 2, immedi ately following the Introduction. Chapter 3 presents a short survey of what is known about how countries

develop, including the experience of today's developed countries during the peri

ods when their advances yield the most useful lessons concerning the develop process (Japan, 1880-1920, Russia and the Soviet Union, 1890-1940, and Germany 1870-1900). It also reviews the experience of three especially successful less developed countries--South Korea, Taiwan, and the Ivory Coast-in an effort to identify whether common factors figure in their development experience. Chapters 4, 5, and 6 concern capital-saving, investment, the roles of

international agencies and multinational companies, and an analysis of the debt crisis. I have placed these topics early in the text because, after a long period of reaction to the thesis that capital is a major factor in development, a reappraisal has come, and because the debt crisis has had such a profound impact. Addition ally, students in recent years are more eager to study banking, credit, and invest ment than was true in the past, and I have found that early emphasis on thete topics builds on their existing interests. These chapters also address monetary and fiscal policies (including taxation, fiscal deficits, and inflation) in the LDCs; 1 found it logically preferable to integrate these subjects with the problems of capital formation and capital flows rather than to put them into a separate chapter elsewhere in the text. A detailed treatment is given in these chapters to the distortions in capital markets, often introduced by government policies, that have received much recent attention in the development literature.

Chapter 7 is a conventional approach to factor proportions, technology, and dualism in industry that is unusual only in the degree to which it include real-world examples. Chapter 8 on population explores current national programs, both success ful ones (Indonesia, Thailand, Singapore, and China), and the less successful

(India and Pakistan). I find that the reasons why programs in general succeed or fail are nicely encapsulated in the experience of these six countries.

Chapter 9, on human capital, considers education, health, and nutrition both as factors in raising productivity and as "basic needs." In Chapter 10 on rural development, the sections on the spread of the "high-yield" varieties and the consequences of their adoption, on rural credit problems, and on agricultural extension services are more comprehensive than in other texts of comparable scope. The length and coverage of this large chapter fully reflect the recent rise in importance of the rural sector in development economics.

Chapter 11, on planning and the market, compares the more questionable forms of comprehensive planning to "lighter" sectoral planning and reliance an market forces in the development process. I have tried to provide a more easy comprehensible treatment of cost-benefit analysis and shadow pricing than other development texts offer. Two appendixes cover technical aspects of the capital output ratio in planning and examine the long-standing "balanced growth" co troversy.

The greatest difference between this text and others in the field is embodie in Chapters 12, 13, 14, and 15, which consider the international economic aspec of development. The depth of coverage in these four chapters reflects my com tion that trade is now probably the single fastest path to development, but represents a path that easily could be closed off by the developed world. Top examined in detail include autarky and import substitution versus export pro tion, prospects for the terms of trade, export cartels, depreciation of the excha rate as a strategy, customs unions, and many additional issues. The increasingly crucial subject of developed-country protectionism, often touched only briefly in other texts, receives a thorough treatment.