Cycles of conventional wisdom on economic development

The author investigates the phenomenon by which certain economic beliefs are ‘known’ to be true. Noting how the prevailing orthodoxy in development economics has moved in this century from anti-protectionist, ‘sound money’ tenets to enthusiasm for intervention, planning and import substitution and back to support for foreign trade and the free market, he examines the extent of economists’ understanding of the process of development and contrasts the way economists think with the process by which policy intellectuals and policy-makers adopt certain beliefs about economics by making spurious connections between concepts and then buttress these beliefs by selective anecdotes rather than subjecting them to statistical tests. His conclusion is that the conventional wisdom about development economics—whatever its current content—should be eschewed in favour of rigorous use of economic theory and empirical evidence.