Political Economy of Development

Flashcards covering the key concepts of Classical Political Economy, including its history, premises, theories of development, and major contributions.

Classical Political Economy

A school of thought in economics that emerged primarily in Britain during the late 18th and early-to-mid 19th century.

Main Propagators of Classical Political Economy

Adam Smith, David Ricardo, Jean-Baptiste Say, Thomas Robert Malthus, and John Stuart Mill.

Main Argument of Classical Economists

Largely self-regulating systems, governed by natural laws of production and exchange.

Adam Smith's View of a Nation's Wealth

Determined not by the gold in the monarch's coffers, but by its national income based on the division of labor and accumulated capital.

Classical Economists' Beliefs

Believed in free trade with an exceptional role for the state to prevent monopolies.

Adam Smith's View of Income

Views income as a national income to be shared among laborers, landlords, and capitalists, originating from labor, land, and capital.

Classical Theories of Development

Argued that the end result of capitalist development is stagnation due to diminishing returns to land and rising labor costs.

Modernization Theory (Walt W. Rostow)

Society needs to develop through systematic stages, characterized by a shift from tradition to modern societies.

Dependency Theory (Andre Gunda Frank)

The need to dismantle unequal relations between the north and south to prevent exploitation and stagnation of southern economies.

World Systems Theory

A critic and response to globalization, highlighting unfairness and exploitation by TNCs and MNCs. Divides the world into first, second, and third worlds.

Influence of Classical Political Theory

Continue to influence governance, wealth accumulation, and development strategies.