Re-Engineering Ideas in Developmental Growth

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Abstract

[...] The rapid increase in methodological sophistication (recently defined as mathiness by Paul Romer in a recent paper), particularly since the 1980s (with the inclusion of financial modelling into economics) was centred on identifying tangible variables in targeting for income led growth across economies, which further shifted the discipline of economics more towards the scientific end of studying economic problems (for both the individual and a collective society). My objective here is to not vilify all economists but highlight a degree of neglect shown by economists (particularly those working as policymakers, technocrats across developing economies like India, China, Brazil etc.), in failing to acknowledge and highlight the importance of going beyond growth metrics in an economy’s journey to development. There is nothing reductionist about the practice of economic modelling till we confuse a given model with the model in identifying a developing economy’s path to greater economic prosperity. Economic analysis and modelling, if skilfully crafted by its practitioners, can be very useful in identifying areas of potential gains and thereby helping to create new constituencies for change in resolving most developmental challenges for economies. Below I discuss a) the Indian case, highlighting some of the accounting problems faced by the economy today in realistically depicting economic growth; b) the limitations to overall growth accounting methods and c) propose a theoretical alternative with an enhanced acknowledgment and adoption of social choice theories as a useful, complementary paradigm for studying what I call as developmental growth.