How does development happen?

• Author: Sen. Amartya

This conference would seem to have two purposes. First, we are celebrating the memory of a great economist who was also a personal friend of many of us here--I had the remarkable privilege of having Peter Bauer as a close friend for nearly half a century. Second, we are examining a very central issue in the theory and the practice of development: How does development happen?

Happily--and not of course by accident--a good way of addressing that question is to ask what made Peter Bauer such an exceptional economist. How development happens was indeed one of the questions that engaged Peter profoundly, and in many ways, he devoted a large part of his life to clarifying how that question may be answered.

I start, however, not with Peter Bauer's intellectual contributions, but with his remarkable character, in particular his self-confidence in sticking to his deep skepticism, his courage in being a lonely voice in expressing disagreement with the then intellectual establishment, and also--no less important--his willingness to try to understand and to respond to arguments on the other side. When I first met Peter during my first undergraduate year in Cambridge, England (it was 50 years ago), Peter was recognized as a challenging thinker but often described around the cloisters as being "way out." He certainly found what we may call "the Cambridge consensus" to be basically wrongheaded.

Bauer's Unconventional Views

Peter Bauer was convinced that there was (1) an overemphasis on the limitation of resources in the poorer countries, a limitation he thought could be overcome much more easily than the established views tended to assume, (2) an underemphasis on the role of exchange, both in general and domestic trade in particular, and (3) an inadequate recognition of how institutions influenced economic behavior, with profound effects on the economy and the society. It was clear to me--even as a radical student who was on the "left" of the Cambridge consensus and had some other reservations about it--that Peter Bauer stood, through his insights and vision, head and shoulders above all the others who were teaching development economics in Cambridge at that time.

I learned, of course, much from Peter's ideas, both in general and in the field of my own work, particularly from the institutional insights in his earliest book, The Rubber Industry, which greatly influenced my Ph.D. thesis on "choice of techniques." But there was also an extraordinarily...