The death of development theory: From Friedrich von Hayek to the Washington consensus. Issue 4 (2nd October 2018)

• Record Type: Journal Article
• Authors: Aroche Reyes, Fidel; Ugarteche Galarza, Oscar
• Is Part Of: Journal of post Keynesian economics. Volume 41:Issue 4(2018)
• Page Start: 509
• Page End: 525
• Publication Date: 2018-10-02
• Subjects: Development theory -- indicative planning -- Mt Pelerin Society -- developmentalist state -- free markets; 330.15
• DOI: 10.1080/01603477.2018.1486210
• Languages: English
• ISSNs: 0160-3477

Abstract

Abstract: Development strategies followed by many countries in the 20th century bestowed a relevant role to the State. During the 1970s, it all reversed, and free markets became paramount to efficiency. F. von Hayek and the Mount Pelerin Society led the way to eliminate the State as a significant economic player, while P.T. Bauer extended such ideas to development economics, which would eventually give way to the Washington Consensus. Beyond actual results of such policies, it is surprising to see the appeal of Bauer's theoretical approach, considering that it is constructed disregarding both empirical evidence, as well as the abundant discussion on development that was taking place contemporarily. This article explores the theoretical process of such reversal in development economics theory.