Development Economics

Amartya Sen's Poverty and Famines (Oxford, 1981) made a single radical claim: famines are not caused by absolute food shortages. The 1943 Bengal famine, in which roughly three million people died under British colonial rule, occurred in a year when Bengal's per-capita food availability was within normal range; the 1974 Bangladesh and 1972-74 Ethiopian famines showed the same pattern. What failed was entitlement — people's capacity to acquire food through wages, trade, or transfers. Sen's argument was that food availability does not feed people; the ability to command food, through whatever institutional channels exist, does. A famine is therefore a failure of social and political organization, not of agriculture. Sen's famine analysis contributed to his later capabilities approach, which evaluates development through people's substantive opportunities and freedoms. That approach influenced UNDP measures and parts of development-policy research.

Two questions organize the field. Why are some countries rich and others poor — and what, concretely, makes people's lives better? Three frameworks compete on the first. Robert Solow's 1956 growth model treated output as a function of capital, labor, and a residual called total factor productivity, and predicted conditional convergence: poor countries should catch up because capital returns more where capital is scarce. East Asia confirmed it; most of Africa and Latin America did not. Paul Romer's endogenous-growth theory replaced Solow's unexplained TFP with ideas as a non-rival input — once a useful idea exists, anyone can use it, making increasing returns possible and putting R&D and education at the centre of growth. Daron Acemoglu and James Robinson pushed deeper in Why Nations Fail and the work that won the 2024 Nobel: capital and ideas circulate, but do little where institutions extract upward instead of rewarding broad participation. Their colonial settler-mortality natural experiment is one of the most-cited findings in empirical economics.

The second question drove a methodological revolution. Esther Duflo and Abhijit Banerjee founded J-PAL at MIT in 2003 and, with Michael Kremer, brought the randomized controlled trial from medicine into development. Deworming programmes, conditional cash transfers, bed-net pricing, and microfinance impact were tested in field experiments rather than argued from theory; the trio shared the 2019 Nobel. The field's centre of gravity moved from grand causal theory — Jeffrey Sachs's big-push case for coordinated aid versus William Easterly's warning that aid distorts the institutions it claims to help is the canonical pair — toward identified, narrow, replicable evidence. The industrial-policy revival, anchored on the East Asian record and championed by Ha-Joon Chang and Mariana Mazzucato, runs counter to both schools and is the live argument of the 2020s.