Old and New Development Economics: A Reassessment of Objectives

The “new development economics” (also called behavioral economics) consists of microeconomic experimentation based on economics and randomized controlled trials. This approach would illuminate the close relationships between preferences, culture, institutions point to new political opportunities. paper describes analyzes economics’s main components argues that is just like old in terms its central assumptions, objectives, recommendations. Despite growing recognition social, cultural, institutional factors profoundly affect decision-making, economists generally lean toward extreme reductionism neoclassical paradigm. It observed research essence economic has been neglected or treated inadequately school’s literature. suggested findings Austrian theory dynamic efficiency, human action’s creative entrepreneurial feature, may allow overcome analytical challenges.