From Anxiety to Nonchalance: “Neoclassical Economic Development” from 1950 to 2000

Neoclassical economic development is the view that there exists a core set of theoretical propositions that define all economic problems—whether for developed or developing countries—and even guide us toward the solutions. Details from local circumstances may need to be filled in, but these are boundary conditions for a general solution. When development economics began in the 1950s, it was rare to find economists who espoused the direct applicability of such views. Some forty years later, when the Washington Consensus triumphed with its mantra of “stabilize, liberalize, privatize,” it was breathing new life into older ideas. Why were obstacles seen in applying eighteenth-century principles in 1950, and how was the path for their applicability cleared?