Peter Bauer’s Dissent on Development (1971) is a powerful collection of essays that offers a unique challenge to then-widespread theories of economic advancement. Bauer astutely argued that economic development is not subject to a general theory but depends on unique determinants that cannot be analyzed through the conventional tools of economic theory.
Among these determinants, Bauer placed significant emphasis on hereditary factors, such as inherited abilities and capabilities, and cultural elements, including values, norms, and institutional capabilities. He argued that the pathway to economic development is intertwined with the specific sociocultural and historical fabric of a society.
Bauer notably critiqued the mainstream notion in development economics that countries with low income and thus low savings must primarily focus on capital accumulation to achieve growth. Without such a focus, it was thought, these countries risk being trapped in a vicious cycle of poverty. In rebuttal, Bauer notes that currently developed nations were once economically disadvantaged but managed to escape poverty and attain growth without singularly focusing on capital accumulation. Bauer’s argument is strengthened by his empirical work, which provides robust evidence of economic growth in regions such as West Africa, Latin America, and Southeast Asia.
Although he did not directly address India’s situation, Bauer’s core ideas relate to the country’s trajectory from a state-controlled economy to a market economy.
Bauer emphasized the importance of free markets, individual enterprise, and limited government intervention in pursuit of economic development. His skepticism about central planning and emphasis on individual economic freedom aligns with the fundamental principles behind India’s economic liberalization of 1991.
Dissent on Development thus stands as a testament to Bauer’s nuanced understanding of economic development.