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Volume 53 Issue 11
January 2022
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Citation: Jijun TANG. The Evolution and Behavioral Turn of Development Economics and Its Contemporary Implications[J]. Academic Monthly, 2021, 53(11): 49-59. shu

The Evolution and Behavioral Turn of Development Economics and Its Contemporary Implications

  • By means of investigation into the integration of behavioral economics and development economic theory in the early 21th century, we found the new insights provide some new foundations for the development economics. Reviewing the evolution of development economics, we analyze the limits of existing neoclassical paradigm, including the traditional or mainstream development economics, new institutional development economics, imperfect information economics and behavioral development economics, particularly discuss the mental accounting, default rule and cognitive biases beyond the economic man model. Hence we make use of the insights from behavioral economics to take into account behavioral failure and complement with market failure, and focus on the information processing or imperfect mental models. We found that behavioral biases lead to imperfect market and leading to Pareto inefficiency.These behavioral failures open up economic development challenges for the poor. So it is necessary to small government intervention (nudge) to correct the behavioral biases into a rational way, combining the behavioral and market failures for the current China to fight the poverty and the economic development with high quality in the New Era.
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    1. [1]

      Baoping REN . The Logic of China’s 70-Year Economic Development and Its Innovation in the Development Economics. Academic Monthly, 2019, 51(8): 27-36.

    2. [2]

      Jianhua ZHANGYuwen ZHOU . Theoretical Innovation in Development Economics Based on China’s Practices. Academic Monthly, 2021, 53(11): 39-48.

    3. [3]

      Ming LU . For Long-term, Overall and Multidimensional Development: The Political Economy of China Road. Academic Monthly, 2022, 54(3): 58-71, 109.

    4. [4]

      Zhiping HU . Political Economy of the Change of Rural Public Service Supply in China: Development Stage and Government Behavior Framework. Academic Monthly, 2019, 51(6): 53-63.

    5. [5]

      Shuguang ZHANGChi ZHANG . Institution Economics of the Right. Academic Monthly, 2020, 52(1): 40-51, 83.

    6. [6]

      Jiaxin ZHOU . Critical Economics and Philosophy of Praxis. Academic Monthly, 2019, 51(3): 17-25.

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      . . Academic Monthly, 2016, 48(08): 5-15.

    8. [8]

      . . Academic Monthly, 2016, 48(07): 5-19.

    9. [9]

      Ye’an ZHOUHaiyan ZHANG . The Evolution of Behavioral Economics over Half a Century: The Historical Trajectory of Paradigm Shift. Academic Monthly, 2023, 55(4): 91-99.

    10. [10]

      Chusheng YEZhaoke REN . The Network Analysis in Economics and the Economic Research of the Network. Academic Monthly, 2019, 51(5): 39-46, 38.

    11. [11]

      Defeng WANGMinqi ZHANG . On the Non-Historical Nature of Economics. Academic Monthly, 2021, 53(7): 22-35.

    12. [12]

      Ye’an ZHOU . Is Economics Seeking a New Micro Basis. Academic Monthly, 2020, 52(12): 30-41.

    13. [13]

      . . Academic Monthly, 2017, 49(06): 178-184.

    14. [14]

      Xudong CHENLin CHENG . Inheritance and Innovation of Traditional Chinese Economic Thought and the Construction of Chinese Economics in New Era. Academic Monthly, 2023, 55(1): 56-68.

    15. [15]

      Yibing ZHANGFugong ZHANGWeiyu KONGTing WU . Economic Discourse and the Formation of Historical Materialism (Symposium). Academic Monthly, 2022, 54(6): 5-10.

    16. [16]

      Tianyong ZHOU . Institution-induced Overage: An Important Terminology of Tansition Economics. Academic Monthly, 2021, 53(4): 45-55.

    17. [17]

      Ming CHEN . Introduction to Political Economy of China’s Rural Modernization. Academic Monthly, 2021, 53(9): 72-84.

    18. [18]

      Weisen LI . Rereading Keynes: Evolutionary Formation and Theoretical Criticisms of Keynes’ Economic Theory on Depression. Academic Monthly, 2022, 54(3): 72-100.

    19. [19]

      . . Academic Monthly, 2016, 48(11): 70-83.

    20. [20]

      LIU Shouying . Political Economy in the Communist Party of China's Theoretical Creation. Academic Monthly, 2024, 56(3): 53-69.

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        The Evolution and Behavioral Turn of Development Economics and Its Contemporary Implications

        Abstract: By means of investigation into the integration of behavioral economics and development economic theory in the early 21th century, we found the new insights provide some new foundations for the development economics. Reviewing the evolution of development economics, we analyze the limits of existing neoclassical paradigm, including the traditional or mainstream development economics, new institutional development economics, imperfect information economics and behavioral development economics, particularly discuss the mental accounting, default rule and cognitive biases beyond the economic man model. Hence we make use of the insights from behavioral economics to take into account behavioral failure and complement with market failure, and focus on the information processing or imperfect mental models. We found that behavioral biases lead to imperfect market and leading to Pareto inefficiency.These behavioral failures open up economic development challenges for the poor. So it is necessary to small government intervention (nudge) to correct the behavioral biases into a rational way, combining the behavioral and market failures for the current China to fight the poverty and the economic development with high quality in the New Era.

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