The role of income distribution in the history of economic development theories

JUAN EDUARDO SANTARCANGELO

Estambul

Simposio; International Symposium on Economic Thought (ISET); 2020

The Research Platform of Economic Thought

The aim of the paper is to analyze the role that income distribution has had within the theories of economic development, and in particular in the neoclassical linear stage development theory, Latin American structuralism, dependency theory, unequal exchange, imperialism and world system analysis. The central hypothesis of the paper is that if one looks at the evolution of development theories through the lens of income distribution, one can distinguish two very different stages. The first one goes from the beginning of development theories in the 1950s to the early and mid-1970s. During these years the concept of economic development began to transform itself and started to evolve, going from being a simple synonym with the concept of economic growth, to gradually incorporating new layers or dimensions. Among the most important dimensions we can point out the generation of employment, increasing productivity, modifying the productive structure, promoting technological change, and progressively income distribution was gaining relevance. However, from the mid 1970s the rise of neoliberalism brought about enormous economic and political transformations which had a direct impact on the way economic development was think; and in particular, in the role of income distribution in it. As a result of the economic policies applied in the last decades, income distribution was gradually abandoned as the core element in economic development theories and I believe that putting it back to its proper place is a necessary condition to achieve economic development in the future.