Globalization and Development: A Re-examination of Development Policy

Abstract

The nature of policy making in developing countries has been undergoing a sea change in recent times. This is due in part to the increasing maturity of the discipline of development economics and in part to the changing nature of the global economy. Development economics has advanced rapidly on both the theoretical and empirical fronts. Better interaction with mainstream economic theory, and the increasing availability of data sets that enable us to analyze aspects of the economy that were previously beyond scrutiny, have deeply influenced the study of development. As far as the real world goes, technological advancement and globalization have had a huge impact on the nature of policy making in developing countries and, more generally, policy making for development.

This chapter was presented as a paper at the conference on Development Strategies towards the 21st Century’, organized by IDE-JETRO and held in Tokyo on 29–30 January 2002. It has benefited from the comments of Takashi Kurosaki, Koji Nishikimi, Jeff Nugent and Hiroshi Sato. The paper also provided the background material for the keynote address to the conference on Labour Markets and Poverty in South Africa in Johannesburg on 22 October 2002, and for a plenary lecture at the South and Southeast Asia Regional Meeting of the Econometric Society in Lahore on 28 December 2002.