Last updated 14 August, 1999

Concept and approach

The first general lesson I draw from economic history and from comparative studies is that the specifics of each development experience cannot be forgotten. . That being said, the protection of property rights and open markets for the international trade of goods, services and assets are often seen as requirements for a sustained development. Moreover, the sequencing of domestic liberalization policies must depend on the regulatory abilities of the state, which may be threatened by liberalization itself, especially with respect to financial markets. This is why changing and creating new institutions, capable of delivering the desired role of the state in economic life, remains very much a matter for national choice, albeit constrained by the initial conditions, both economic, social and political.

As development refers to the enhancement of the standards of living of individuals, the process encompasses the reduction in poverty, improvements in health and education of the population, and an increase in productive capacity as well as rising per capita income. Although the core concerns are clear enough, the boundaries of development studies, and development economics in particular, are essentially arbitrary. This is why competing paradigms, rather than a dominant orthodoxy, characterized the study of the structure and behavior of poor countries.

Then the collapse of the paradigm of development based on import-substituting-industrialization in most developing countries; the demise of centrally planned economies of Eastern Europe and the Soviet Union; and the emergence of a global economy impacted strongly on the theory and practice of development. Each one of these three outcomes contributed to bring about some convergence in paradigms, which is reflected in the growing awareness of the crucial role of the protection of property rights and of open markets for the international trade of goods, services and assets.

Put in another way, there is increasing recognition of the importance of micro behavioral responses to a range of incentives and unobserved factors both for analysis and for policy formulation. A process of economic reforms in developing countries by reducing state involvement in the economy through privatization, opening up the economy much more to foreign trade and investment and allowing market forces and the private sector to guide resource allocation to a much greater extent has been going on for over a decade.

These reforms have deepened and broadened the scope of development studies, to the point that they are now close to what was once thought of as comparative economics. The comparison of market economies with centrally planned ones (seen as developed in terms of their command over resources, education and health) was conceptually very different from development. Yet, countries in Eastern Europe, the Baltics and the Commonwealth of Independent States have embarked on market –oriented transition in large part because they believe it will advance economic, social and political development.

Even the core concerns of economic development are mixed with very diverse topics. A list of chapters from a recent handbook reads as follows: Savings, credit and insurance; Technological change and technology strategy; Institutions and economic development; Poverty, institutions, and the environmental-resource base; Poverty and policy; Power, distortions, revolt and reform in agricultural land relations; Human and physical infrastructure: investment and pricing policies; Structural adjustment, stabilization and policy reform: domestic and international finance; Trade and industrial policy reform, etc.
 

To read more about concept and approach, including the special case of China, click here.

 
Interest in comparative development processes: Portugal and Africa, Portugal and Europe

My interest on the process of economic development began in the late in the 1960s. The early interest was specific to Portugal: how did it move from the soft loans of the Marshall plan to tapping international financial markets?

When I was stationed in Angola, I witnessed the drastic change in Portuguese development strategy brought about by the widespread nationalizations of 1975. At the time,  I offered a seminar on Development Policies at the Faculty of Economics, University of Luanda,  and a course on Theory of Dependence, where I contrasted the neoclassical and marxist paradigms.

At Berkeley College, Yale, I offered an undergraduate seminar on Portugal and Africa: from colonialism to socialism in Spring of 1979.  At Princeton, I was associated with the Research Program in Development Studies (RPDS) and tought a Policy Conference on North-South Trade Negotiations, a Graduate Course on Macroeconomic Policy and Planning in Semi-Industrialized Countries and a Workshop on Exchange Rate Policy in Developing Countries with colleagues from the Woodrow Wilson School and the World Bank.

At Nova, the first course I taught, in the Fall of 1976, was on Development Economics.   I offered it again during  Fall 1981, while on leave from Princeton. Upon returning as visiting associate professor in Fall 1984 and Spring 1985, I gave the graduate course on economic development . In November 1997, I organized at the executive training center Nova Forum an advanced course on African development cooperation, directed towards officials of the Instituto da Cooperação Portuguesa (Institute of Portuguese Cooperation) and of similar institutions in the Portuguese-speaking countries. This course obtained the support of the Development Economics vice-presidency of the World Bank and of the Development Aid Committee of OECD. A second course, on the specific case of Mozambique, was offered in January 1999.

Also reflecting my interest in development economics, especially the political economy of development in Africa and Latin America, is my affiliation with Center for Social Economics (CSE) of the Institute for Tropical Research (IICT) and with the Comittee of Lusophone Communities (CCL) of the Lisbon Geographical Society.

In the late 1980s, my long-standing interest in development has benefited from my involvement in process of transition from central planning to the market at the European Commission. Both development and transition economies raise issues of ethics which are also covered in my courses on international economics and macroeconomics.

In fact, I draw examples relevant for development and transition economics from the case study of Portugal  in the following contributions: